Talk around the office water cooler often gravitates to one issue: money – and the lack of it. And whom do employees most often blame for their financial woes? Their employer. However, the real issue is often not what employees earn, but what they keep. Many people don’t know how to manage their money, how to spend it, how to save it. That’s where employers can step in. By educating their employees and their families about how to better manage their money, employers can benefit their employees and the company in a number of ways:
Financially literate (thus more financially secure) employees are more focused, motivated, and enthusiastic on the job.
Reduce employee stress.
Financial problems are a major cause of job stress. Less stress means fewer injuries and lower health-care costs, improved employee/employer relations, and increased morale.
Improve employee loyalty.
Companies that help financially educate their employees are telling their employees they care about their welfare, which, in turn, inspires greater loyalty and hard work.
Encourage participation in retirement plans.
As more and more companies turn to defined-contribution plans, the need for general employee participation in such plans is vital, especially for higher-paid employees and the business owners. In the case of the popular 401(k) plan, 35 percent of eligible employees do not participate often fail to invest in the plans wisely, leaving inadequate resources for retirement and causing resentment toward the employer.
Develop appreciation of non-cash benefits.
Employers have turned to more flexible, non-cash employee benefits that require employees to design their own benefit packages. Financially literate employees are better able to understand and appreciate these benefits options.