Benefits of Financial Counseling and Education in the Workplace
Most people inherently know that financial education is a good thing, especially in the current economy. Making good financial decisions, saving, and using credit intelligently are attributes that everyone should strive to possess.
What is not inherently known is that financial education for employees makes good financial sense for employers. In fact, research has shown that there is a three-to-one return on investment for employers who provide financial education to their employees, as twenty-five percent of the workforce has financial problems severe enough to affect productivity at the job, and the cost to an employer for every financially troubled employee ranges from $450 to $2,100. This is due to lost productivity, absenteeism, tardiness, garnishments, accidents, disability and workers compensation claims, increased health care costs, theft, and, when employees cannot contribute to a flexible spending account, higher Social Security costs.
Financial stress also takes its toll on health, contributing to the above problems. A 2009 study by the American Psychological Association found that money was respondents’ top source of stress. In MetLife’s Seventh Annual Study of Employee Benefits Trends they found that employees who assessed their own health as fair or poor also said they were in worse financial shape than their healthier counterparts. And a recent poll conducted by the National Foundation for Credit Counseling found that twenty-four percent of the respondents said that financial stress was causing their health to suffer, while sixteen percent felt their sleep was affected.
In addition, an Associated Press/AOL poll found that, compared with people who had low debt stress, those with higher debt stress had more than three times as many ulcers or digestive tract problems; eleven times as many headaches or migraines; six times as many incidents of depression; twice as many heart attacks; and sixty-five percent more muscle tension or lower back pain.
In addition, those with high debt stress were much more likely to have trouble concentrating and sleeping, factors that can affect productivity at the job. They were also prone to getting upset without reason, which can manifest itself in the workplace.
Employer-sponsored workplace financial education is a strong investment. A good financial wellness program should have two components: group seminars on appropriate financial topics, either through in-person programs or through webinars, and referrals made to a reputable financial counseling agency for those employees who need individual help. Look for a provider that offers both.
Choosing a reliable financial education provider is easy. Meet with the agency, see course catalogs, look at the materials provided in the program, look at outlines of what is taught, and secure references. You can also observe a class or two to ensure you are comfortable with the provider. Consider the research questions offered by the Federal Trade Commission (FTC) piece Fiscal Fitness: Choosing a Credit Counselor.
There is a great deal of research and writing on this subject. A great place to start is with the Personal Finance Employee Education Foundation.
Invest in financial education at the workplace. It is invaluable for employees and a boost to the bottom line for employers.