Many companies do not realize this, but many of their employees struggle with an escalating epidemic that is affecting today’s workforce.
One in three employees report that issues with personal finances serve as a distraction at work, according to a report published by the Center for Financial Services Innovation. Financial stress contributes to lost productivity, increased absences and healthcare claims, higher turnover and costs associated with workers who cannot afford to retire on time, the report also found.
The potential solution? Financial literacy education in the workplace. Financial consultant Kyle Sanders is here to share why and how this can help not only employees, but also their workers.
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When employees spend time worrying about their personal finances, productivity is what takes the biggest hit. Not only are they abusing company time, but important work is not completed, further placing companies in a dire situation. Moreover, workers recognize the severity of this epidemic, whether their companies do or not, as employees admit their concerns with personal finances interfere with their quality of work, the Personal Finance Employee Education Foundation found.
For these reasons, there is a very compelling business reason for employers to advance the well-being of their workers through financial literacy education in the workplace.
Increasingly, companies are beginning to recognize the value in non-traditional, company-supplied benefits that will strengthen employees’ financial wellness. In fact, according to a 2015 study conducted by Aon Hewitt, 93 percent of 250 employers surveyed said they want to do more to enhance employees’ financial well-being than providing 401(k) matching.
The desire to provide unique employee benefits isn’t the only reason financial literacy education in the workplace is gaining in popularity. Today’s workforce also demands a benefit that enhances their entire family’s financial knowledge for two very significant reasons. First, we are entering what’s being referred to as “The Great Transfer of Wealth.” Secondly, many parents aren’t very comfortable speaking to their children about money and could use some guidance on how to raise financially literate children.
Research from the Boston College Social Welfare Research Institute states the Baby Boomer generation will transfer $41 trillion in assets to their Gen X and millennial children in this Great Transfer of Wealth our country is currently experiencing. This large financial transfer has led many parents and grandparents to wonder how they can have important financial conversations with their heirs to ensure the inheritance will be responsibly managed.
However, the problem with this realization is that many parents do not speak to or educate their children about money. This means a considerable amount of money will be put in the hands of potentially fiscally incompetent children who are at risk of making poor money management choices with their inherited money.
Moreover, it is especially essential parents and grandparents learn how to have these conversations with their children, as 60% of wealth is lost to a lack of communication and trust, according to Roy Williams and Vic Preisser, the authors of the book Preparing Heirs.
This learned knowledge can begin in the workplace. For companies interested in providing family-focused financial literacy education to employees, there are several factors that should be taken into consideration when planning for this type of benefit. For instance, companies should ensure outside presenters are qualified financial consultants with knowledge of the topic. Employers can also select between differing event platforms, such as a lunch-and-learn or after-hours events. Regardless of specifics, employers can enhance this benefit by offering this education on an annual basis.
With many American workers suffering from financial distress combined with the reality that our nation’s Great Transfer of Wealth is making parents question if their children are fiscally responsible enough, providing family-focused financial literacy education in the workplace may be key to increasing employee productivity.
Kyle Sanders is the owner and lead financial consultant of Legacy Consultants Group, a financial advisory firm located in Indianapolis. His workshop, “Raising Financially Fit Families,” is designed to educate parents and grandparents on the ways to teach their children about finances. For more information, email Sanders.
This may be the key to increasing employee productivity: Financial education at work
