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. A company that promotes financial literacy among its employees can add hundreds of thousands of dollars a year to its bottom line. 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 possibility to change their future for the better.
Financial security through employee education
To help its workers achieve financial security, also as its bottom line, a company can do more than provide a paycheck. According to the Durango Herald, employees can waste up to 20 hours every month during work worrying about finances instead of working. A survey was done by creditcards.com showing that 57 percent of individuals do not spending budget when 40 percent spend 110 percent of their income instead of less. Money and debt issues usually relate to relationship difficulties also. The reason why 50 percent of employees had been divorced was of because financial security issues.
Getting financial literacy to help get the bottom line
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 include improvement in productivity, morale and company loyalty. Higher financial literacy can also reduce absenteeism, turnover and workplace distractions also as operational risk across a company. 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. Three to one is how employee financial literacy typically works out.
Making employee financial education really happen
Financial literacy is part of the corporate culture at Weyerhaeuser, a Washington state timber company. Business Week reports that Weyerhaeuser is acknowledged as one of America’s leaders in providing financial education to nearly 14,000 employees. Employees of the company were offered 40 retirement, benefits and wellness programs in just the last year of employment. After a retirement seminar for employees, 99 percent said they could make better choices for their retirement when 88 percent they would change retirement choices they already did make. Most people who participated really enjoyed the program and loved the company for offering them.
Discover more info 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
