The Solution – What’s good for your employees is good for your business!
Like other personnel problems, you can either treat the symptoms of financial stress or you can treat the cause of financial stress. Treating the symptoms through stress reduction techniques and stress counseling only teaches employees how to deal with the stress; it does not prevent the stress from recurring nor eliminate it.
To increase productivity and profits, employers must treat the cause of the stress; employers must take the lead in teaching their employees how to manage their own money and how to reduce their debt levels. As basic as that sounds, over 98% of the workforce has had no education in managing their money. Employer sponsored financial education is fast becoming a “best practice” among industry leaders who want a productive and profitable workforce.
5 Components of an Effective Employee Financial Education Program – by Ned Lenhart (except #3)
1. Unbiased Information
To be most effective, employee financial education must be presented by professionals who are unbiased in their recommendations. Employees want solid and unbiased information and do not want workshops that are merely sales presentations for insurance or investment programs. Effective employee financial education workshops should be “self-contained” and should not require the purchase of supplemental material such as books, videos, or CDs.
2. Money Management and Investing Education
Effective employee financial education should first teach employees how to manage their money, reduce their debts, and ease financial stress before teaching them how to invest for retirement. Financial stress usually arises from employees who are unable to meet their monthly obligations and not from the feeling they are investing too little into their 401(k).
3. Active Participation
Effective employee financial education should be offered where employees play an active part in learning the tools and techniques. Employees need the opportunity to ask questions and share their opinions in an open and inviting forum.
4. Teach Easy-To-Use Money Management Tools
Effective employee financial education empowers employees to take control of their personal financial well-being. Effective workshops teach employees the tools and techniques they can use to immediately begin stretching their paychecks and get out of debt. Employees want to be better managers of their money…what they lack are the tools to do it.
5. Ongoing Support
The most effective financial education programs allow employees to obtain information and assistance after the workshop is complete. This is most effectively done through confidential e-mail correspondence between the employee and the workshop provider. This follow up information is not “advice” but “education.” The purpose of employee financial education is to empower employees for the long term to take control of their finances.
Conclusion
Employers who stay ahead of the curve will reap the benefits of more profits through better employee productivity, lower absenteeism, less work time wasted dealing with financial concerns, lower turnover and better employee health. As the financial realm gets more confusing and volatile, it is more imperative than ever to put in place a financial education system that will benefit employees and the employer alike.
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The employee financial wellness benefits program offered by CFOSimple assists employees with financial issues by providing one-on-one coaching, web-based software and free, unlimited customer and technical support. Employees may use a combination of outside counseling and our financial resources to get them back on the road to financial health and peace of mind.
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