Not a Member? Get access to HR news and resources that you can trust.
Don't leave the task of calculating total cost of workforce to the finance department.
Is your employee handbook ready for the changing world of work? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
60+ new SHRM Seminar dates in 10 U.S. cities and virtually.
Expand your influence and learn how to become an effective leader -- Join us in Phoenix, AZ, October 2-4, 2017.
Providing employees the tools to become financially literate about the basics—knowing how to manage personal savings, credit, and create a spending plan—helps improve factors that affect the organization’s bottom line, such as productivity.
“It’s also the right thing to do as stewards of [employees’] well-being,” said E. Thomas Garman, president of the Personal Finance Employee Education Foundation (PFEEF) he formed in 2006.
He hammered home the value of employee financial literacy during an Aug.6, 2008, Society for Human Resource Management webcast, “Financial Stress in the Workplace: How Healthy Employee Personal Finances Can Help the Employers’ Bottom Lines.”
Thirty million U.S. workers say they are seriously financially distressed and dissatisfied with their finances, he said. These “financially unwell workers,” he said, are passive, unengaged in their work, confused and anxious over mortgage and college loans, vehicle and credit card payments, and more.
“They need help with paying down their bills,” he observed. “Employers often recognize these issues but don’t do anything. They’re not sure what to do,” he said during the hour-long webcast.
Alleviating employee financial distress and increasing financial wellness is not about salary increases, bonuses, retirement education workshops, marriage counseling or employee assistance programs, according to Garman.
“It’s about the basics,” he said. It’s about offering benefits information and education, credit counseling, a credit union, retirement education, financial advice and financial coaching that changes behaviors.
Workplace education programs and advice have been underutilized and employees do not know how to help themselves, Garman said during the presentation.
“Employers don’t understand the value of providing workplace-based education that makes the difference,” he said, but cautioned employers not to offer that advice themselves.
Instead, he encouraged employers to provide workers with easy access to financial programs and a provider that focuses on the financial basics.
Demand more from your current financial program providers and insist on a coordinated, quality program that emphasizes a spending plan, credit management and saving, he said.
Look at the mix of programs your provider currently offers and try to fill in the gaps with what works best for you, he said.
“Go cautiously and select some providers that will promise, and then deliver on those promises, and let that program grow,” Garman advised.
“If your workplace financial education program is successful, keep it,” he says on the PFEEF web site in a statement aimed at HR directors. “If not, warn the provider to improve results in six months or go hire a provider that will do the job right so you can enjoy the thanks of your employees as well as applause from your boss for the improved bottom-line results.”
Garman used the webcast to promote the free tools his foundation provides, such as the eight-point online Personal Financial Wellness scale. He also noted that PFEEF subsidizes the employer’s cost of conducting research on financial education and the employer’s return on investment for providing such education.
Resources can be found on the Foundation’s web site, including a “best providers” list and a checklist of the components of a quality financial program. Garman also offered HR professionals use of his PowerPoint materials. A pdf version of the webcast can be found at http://www.shrm.org/webcast/08august/garman.pdf
Kathy Gurchiek is associate editor for HR News. She can be reached at email@example.com.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies