Financial literacy is so critically important to working Americans that it can make them more productive and less vulnerable to major economic uncertainty, according to a new survey, but only about half of employers said they provide basic workplace financial education.
The research findings also suggest most organizations that pass benefit costs on to their employees felt obligated to provide ongoing financial education to help them make appropriate financial decisions.
“The value of employee financial education is clear,” said Judith Cohart, president and CEO of the Personal Finance Employee Education Foundation, which conducted the survey in conjunction with Employee Benefits News. “The challenge is to overcome the barriers that prevent employers from providing this benefit to their employees.”
She will analyze the findings at the EBN-produced 25th annual Benefits Forum & Expo Sept. 9-11 in Phoenix, Ariz., during a preconference workshop, “Financial Wellness at Work.” Joining Cohart will be BF&E Conference Co-Chair David Albertson, who’s also employee benefits group editorial director for SourceMedia, EBN’s parent company.
Survey highlights point to financial literacy as a linchpin for optimizing employee performance, as well as understanding and appreciating their benefits.
Most survey respondents thought basic workplace financial education is important or extremely important to the overall level of productivity in their organization (83.3% compared to 70% in 2010). Moreover, 94% cited employee financial literacy as important in reducing vulnerability to major economic crises.
While 81.8% of the respondents provide the required investment/retirement education associated with retirement plans (vs. 88% in 2010), only 51.5% said they provide basic workplace financial education that includes budgeting, debt reduction and credit management. However, it’s worth noting that the number is up substantially from 28% in 2010.
Several barriers to providing basic workplace financial education were cited. They included high costs (54.5% vs. 49% in 2010), interference with employee work time (48.5% vs. 58% in 2010) and too many higher priorities (69.7% vs. 71% in 2010). Half the respondents weren’t sure they could get upper management to buy into the provision of workplace financial education – a number that was unchanged from 2010.
But most respondents whose firms have implemented cost-shifting strategies felt a moral obligation to do something. For example, 69.7% thought employers that pass benefit costs on to their employees have a responsibility to provide ongoing financial education to help them make appropriate financial decisions. The number rose substantially from 2010 when it was 53%.
In light of the recession, the number of employers that noticed an increase in garnishments fell to 37.5% from 51% in 2010. Similar decreases were seen in terms of emergency loans, which fell to 36.4% from 42%, and an increase in requests for more time off to handle financial issues, which fell to 25% from 34%.
The Personal Finance Employee Education Foundation is a nonprofit organization that promotes financial education in the workplace through showing employers that providing financial education can improve worker productivity and employer profits.
For more information, visit www.benefits-forum.com.
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