A company doesn’t do also when their employees can’t even deal with personal finances. Money difficulties at home can lead to lower productivity at work, health troubles and excessive turnover. A company is more likely to make hundreds of thousands of dollars more a year with employees that are literate in finances. The weak U.S. economy has taken a toll on employee benefits like health insurance and matching retirement plans. With personal finance, companies will still have the chance to change their future for the better. Resource for this article – Employee financial education is proven to boost the bottom line by Personal Money Store.
Educational financial security
To help its workers achieve financial security, also as its bottom line, a company can do more than provide a paycheck. 20 hours of work each month is wasted on worrying about finances for those with financial difficulties reports the Durango Herald. The newspaper cites a survey of American workers by creditcards.com that found 57 percent do not spending budget and 40 percent spend 110 percent of their household income. The survey also found a correlation between consumer debt and relationship troubles. Fighting about financial security was a major reason 50 percent of the workers in the survey were divorced.
Financial literacy connects to profits
The goal of the Personal Finance Employee Education Foundation is for employees to start getting their education. The PFEEF claims that financial literacy programs contribute hundreds of thousands of dollars each year to a company’s bottom line. Results of employee financial education consist of 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. PFEEF has an ROI calculator online with an investment model that helps companies see how it really will help their company. Three to one is how employee financial literacy usually works out.
Employee financial education in action
A company in Washington state, Weyerhaeuser, has financial literacy as part of their culture. 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. 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. Weyerhaeuser employees were glad the company offered the programs that they thought were very useful.
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
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