Workplace Financial Education Pays

Why might an organization offer financial education to its workers?

The International Foundation recently surveyed member organizations across the United States and Canada on the financial education approaches and offerings they provide to plan participants. The survey revealed an abundance of evidence justifying employers’ investments in financial education. Here are some highlights. 

More than three in five respondents believe participants face more personal financial challenges today compared with five years ago, and one-half of organizations have experienced an increase in demand from employees/participants for financial education in the past five years.

Stress and inability to focus on work were the most common work issues associated with financial challenges. Two in five respondents said the average employee in their organization is not at all or only a little financially savvy, and more than one-third believe the average participant at retirement age in their organization is not at all or only a little prepared for their retirement.

In summary, many employees are facing financial challenges that affect their financial security and their ability to perform at work, and many are demanding their employers step in and provide help.  

So how are organizations meeting this growing need and demand? More than two-thirds of organizations are now providing financial education to employees, and more than one-third of those have just begun providing it in the past five years. I think it’s safe to call it a trend at this point.

How do organizations ensure participation and engagement and provide relevant information across their diverse workforce populations? Customization is key. Efforts to expand the reach of and customize financial education include offering financial education to spouses/partners (42%) and retirees (26%). One-quarter provide education in languages other than English (most commonly in Spanish in the U.S. and French in Canada). Nearly one in five customizes financial education based on age/generation. One in ten organizations targets financial education around life events.

Have these efforts been successful, though, and are they still growing? Overall, two-thirds of organizations with financial education rate their initiatives as successful. Looking to the future, more than one-third of organizations with a financial education budget plan to increase their budgets in the next year, and one in five organizations without such a budget is considering one. 

Is it time your organization considers how it might increase its emphasis on financial education? Share your thoughts in the comments below!

View complete results and more information on the Financial Education for Today’s Workforce: 2014 Survey Results.

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