Is it time to offer financial education as a benefit?

Register now

Whether employers realize it or not, they have employees who are distracted at work due to stress about their personal finances. According to a recent report from the Personal Finance Employee Education Foundation, one in four workers suffer from serious financial distress. Of those 30 million workers, 30 to 80% of them spend time at work worrying about their stressful personal financial situations and dealing with financial issues instead of working.

Not only are those stressors having a negative impact on employees, but it’s affecting employers, too. These dire statistics are leaving many employers wondering how they can ensure their workers leave their worries behind and focus on workplace responsibilities instead. The good news? Many employers are finding financial education in the workplace may be the solution to this escalating epidemic in the American workplace.

Even workers who aren’t stressed about their personal financial situations can benefit from financial education in the workplace that helps them teach their children and grandchildren about money matters. Additionally, these programs help employers take the necessary steps to reduce employees’ financial stress and improve the productivity amongst those suffering from financial distress.

By simply providing basic financial literacy education to all employees, productivity levels increase, along with employee satisfaction. Financial literacy education optimizes employee performance across the board, regardless of each employee’s current financial situation. This type of workplace education also pairs well with other conventional company-supplied benefits, such as health insurance and 401(k) plan matching.

However, while financial literacy education in the workplace is gaining popularity, not all employers fully understand which financial literacy education programs are most beneficial for their employees. There are two very compelling reasons why a financial education program that focuses on helping your employees better educate their children and grandchildren on money matters.

By giving your employees the tools and lessons they need to help their children and grandchildren make sound financial decisions, you’ll help them prepare their heirs for the enormous transfer of wealth currently taking place. The baby boomer generation is transferring $41 trillion in assets to their Gen X and millennial children, according to research from the Boston College Social Welfare Research Institute. Without the proper financial literacy, your employee’s children and grandchildren are at risk for being painfully unprepared to maturely manage a large lump sum of money that will appear in their lives at some point.

Another reason your employees would find value in a financial education program that helps them instill sound financial literacy knowledge in their children and grandchildren is straightforward: most adults aren’t very good at talking to their children and grandchildren about money. Whether it’s because money is considered a taboo topic to discuss amongst family or the fact that many people don’t know how to teach their children and grandchildren about money, there is usually a reason why financial matters aren’t discussed within families.

However, better communication with children and grandchildren about money is crucial to helping them be prepared to handle inheritances responsibly. Sixty percent of wealth is lost to a lack of communication and trust, according to Roy Williams and Vic Preisser, the authors of the book “Preparing Heirs.” Much of this lack of communication and trust is a direct result of parents and grandparents not knowing how to have this conversation with their children, or not thinking it is important to facilitate this conversation.

Now more than ever, parents and grandparents need to start talking to their children and grandchildren about money to help ease their own financial stressors. Workplaces can help them do this. Not only will the right financial literacy education help employees raise financially fit children and grandchildren, but parents can also find confidence when their children’s finances are in order as well.

Providing family financial literacy education in the workplace is as simple as hosting a qualified financial consultant with knowledge of this topic to present during a work-sponsored event. Whether it be a lunch-and-learn or after-hours event, employees will benefit from this type of event. After all, a parent’s greatest mission is to provide their children with tools for success, and what better way to do so then by providing them with the knowledge and real-world experiences to draw back on as they grow into financially responsible adults?

Employers can further enhance this benefit by providing ongoing financial literacy training and education to their employees, such as hosting this type of workshop on an annual basis. Furthermore, employers should consider allowing employees to bring spouses and co-parents to the event, as it will further enhance the benefits of such workshops. In these instances, it might make sense to host the event following normal work hours and arrange for child care services during the event, making it even easier on parents and grandparents with young children to attend.

With a significant percentage of our workforce today suffering from serious financial distress, the many benefits of financial literacy education in the workplace prove that it is time for employers to start offering this education as an employee benefit.

For reprint and licensing requests for this article, click here.
Financial wellness Financial literacy Financial stress Retirement planning Retirement benefits Retirement readiness