If employees learn more about personal finance, a company tends to do better. Money troubles at home can lead to lower productivity at work, health issues and excessive turnover. Employees with financial literacy mean a company will get hundreds of thousands of dollars a year more. The weak U.S. economy has taken a toll on employee benefits like health insurance and matching retirement plans. With personal finance, companies will nevertheless have the opportunity to change their future for the better.
A company does more than just give their employees a check when trying to get financial security. The Durango Herald reports that Employees with serious financial troubles can waste as many as 20 work hours a month worrying about their finances. Rather than spending what they make, the 40 percent of Americans spend 110 percent of what they make every year, when 57 percent don’t budget their money at all. Money and debt issues generally relate to relationship problems also. 50 percent of workers divorced said financial security was the reason.
Company profits and financial literacy
Promoting employee financial education is the mission of the Personal Finance Employee Education Foundation. Thousands are added to a bottom line with financial literacy programs, reports the PFEEF. Results of employee financial education contain improvement in productivity, morale and company loyalty. Financial literacy also helps with turnover rates, distractions at work, operational risk, and absents. PFEEF has an ROI calculator online with an investment model that helps companies see how it really will help their company. Employee financial literacy means companies will get a three to one investment.
Getting employee financial education
Financial literacy is a requirement of Weyerhaeuser which is a timber company that is based upon in Washington state. Business Week reports that Weyerhaeuser is recognized as one of America’s leaders in providing financial education to nearly 14,000 employees. 40 retirement, benefits and wellness programs just last year were offered to its employees. Employees who attended Weyerhaeuser’s financial literacy seminars said that they were better informed about their retirement programs, 99 percent thought that they could now make better retirement choices, and 88 percent said they would change some of their retirement choices. Most individuals who participated really enjoyed the program and loved the company for offering them.
Further reading
Durango Herald
durangoherald.com/sections/News/Columnists/Money_Savvy/2010/08/04/Workers_debt_can_be_companys_problem/
ROI
personalfinancefoundation.org/roi/roi-model.html
Business Week
businessweek.com/investor/content/jul2009/pi20090722_246198.htm
