Once a company benefit available only to top-tier executives, financial advice is becoming a mainstream employee perk.
Workplace research and anecdotal evidence suggest that employees exposed to one-on-one fiscal education programs are more likely to seize control of their finances, save more money, better prepare for life’s big moments and stress less at work.
For their part, employers can expect to see not just a boost in employee morale and productivity, but growth in their 401(k) plan participation and increasing contribution levels as a percentage of salary.
“A substantial portion of employees – roughly 15 to 25 percent – spend time on the job dealing with personal money matters like paying for plane tickets to visit sick parents and unexpected house, car or medical expenses,” said William Barnett, a workplace financial specialist in Indianapolis. “Paycheck-to-paycheck living is the norm for many, and at times, it can get so overwhelming that it’s ironically hard for people to focus on the work that provides the paychecks.”
In an effort to help alleviate some of that stress and ultimately put the emphasis back on work, more employers are offering financial planning benefits like investment and retirement advice, according to the Society for Human Resource Management.
Also, some employers, according to SHRM, offer employees access to financial or investment training designed to educate them about personal finance. This training could include helping employees manage their assets, understanding basic financial concepts, and income planning for college savings and debt management.
Employers are taking a mix of approaches in this doing this.
Twenty-five percent of organizations surveyed by SHRM offered one-on-one financial advice, 24 percent offered online advice and 20 percent offered in-group or classroom financial advice.
The Meredith Corp., which in part publishes Better Homes and Gardens magazine, is among them.
The company has developed a financial wellness program that includes a range of worksite and online financial education workshops, personalized one-on-one financial planning sessions and an annual Personal Financial Wellness Checkup.
“The primary goal of Meredith’s wellness initiative is to help our employees enjoy a long and healthy life, right now and during retirement,” Meredith President and CEO Steve Lacy recently told the Personal Employee Finance Education Foundation, a non-profit that exists to promote and facilitate fiscal wellbeing in the workplace.
“We expanded our wellness program beyond health-related initiatives to include financial wellness. By providing employees financial information, resources and tools, we hope they are financially fit, in addition to being physically fit, at retirement.” In its research, MetLife found that adding financial preparedness to corporate wellness programs was a positive addition for both employers and employees.
Financial stress is a prime cause of personal stress, with 53 percent of the total workforce surveyed reporting they worry about making ends meet. Helping to alleviate that stress and facilitate employee financial security can be a major driver in accomplishing business goals.
More than half of the employees surveyed by MetLife said they would be interested in employers helping provide sound financial advice and guidance.
Employers in the MetLife study agreed that financial stress, in addition to impacting employee health, also affects productivity. Fifty-eight percent said that financial “illness” contributes to employee absences at their companies and 78 percent also agreed that worry about personal financial problems while at work distract employees to the point that they are less productive.
Rich Hunt, director of retirement services for Major League Baseball, shared details in a recent blog about the type of financial education program his employees were seeking. Responses to his questions surprised him, with employees reporting they were unable to save until their overall finances were in order. Hunt concluded a basic and well-rounded approach was best.
“For those employees who are not saving, you need to teach them first how to budget and reduce their debt,” Hunt said. “Once they have their financial house in order, the 401(k) education you provide will then become relevant to them.”
Those who are more fiscally savvy might still need help in other areas such as long-term care planning, college savings and investment strategies, he said.
“If you are trying to paint a beautiful landscape you wouldn’t only paint the trees,” Hunt said. “It’s important to paint the full financial picture for your employees. Yes, it will take more work on your end, but your employees will be much more grateful for this and you will find it to be a much more rewarding experience for you.”