Employees with poor personal finance habits can affect a company’s profitability. Money troubles at home can lead to lower productivity at work, health and excessive turnover. Employees with financial literacy mean a company will get hundreds of thousands of dollars a year more. Health insurance and matching retirement plans have hurt employee benefits during the economy fairly bad. But a company can nevertheless provide a safety net for its employees with education in personal finance.
Employee education to secure finances
When working towards financial security, a company can do a lot more than give a paycheck to their employees. 20 hours of work every month is wasted on worrying about finances for those with financial difficulties reports the Durango Herald. Rather than spending what they make, the 40 percent of Americans spend 110 percent of what they make every year, when 57 percent do not budget their money at all. The survey also found a correlation between consumer debt and relationship difficulties. The reason why 50 percent of employees had been divorced was of because financial security issues.
Company profits and financial literacy
The goal of the Personal Finance Employee Education Foundation is for employees to start getting their education. Thousands are added to a bottom line with financial literacy programs, reports the PFEEF. Productivity improves, along with morals and company loyalty when employees are better educated in finances. Employees show up more often, are less distracted, don’t quit as often and operational risks are minimized when employees have financial education. The PFEEF provides a return on investment model and an ROI calculator online that a company can use to estimate the benefits of employee financial education. Employee financial literacy means companies will get a 3 to one investment.
Employee financial education happening
A company in Washington state, Weyerhaeuser, has financial literacy as part of their culture. It was reported by Business Week that Weyerhaeuser gives all 14,000 of their employees financial education which gets them notices. Employees of the company were offered 40 retirement, benefits and wellness programs in just the last year of employment. 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. Participants in the program thought the seminars were a valuable employee benefit that enhanced their optimistic feelings about Weyerhaeuser.
Find more information on this subject
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
