Benefits of Employee Education

Increase the Bottom Line by Helping Distressed Employees During Challenging Financial Times Presented by E. Thomas Garman, President, Personal Finance Employee Education Foundation

Employee Personal Finances and the Bottom-line ,[object Object],[object Object],[object Object]

Employers Often Recognize These Issues… But Do Nothing. “ You can lead a horse to water, but you can’t make it drink.”

[object Object],[object Object],Let’s Talk About…

[object Object],[object Object],[object Object],[object Object],Employee Personal Finances USA System of Retirement Income Security

[object Object],[object Object],[object Object],Defined-Benefit Retirement Pensions (DB Plan =Monthly checks for life)

[object Object],[object Object],[object Object],A “median” balance means half have saved less! Defined-Contribution Retirement Savings Plans (DC Plan = Lump Sum at Retirement to Manage) Average balance: $58,000 Median balance: $19,000

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Employee Personal Finances Retirement Saving Realities

“ Financial Literacy” is knowledge about • Spending Plans • Credit Management • Savings AND The lack of financial literacy is the major reason why employees do not save for retirement BIG POINT

[object Object],Financially Unhealthy Employees

Source: InCharge Education Foundation, National Norms on InCharge Financial Distress/Well-Being Scale © for General Adult Population. 1 Means “Overwhelming Financial Distress/Worst Financial Well-Being”; 10 Means “No Financial Distress/Excellent Financial Well-Being” © Copyright by InCharge Education Foundation and E. Thomas Garman, 2004-2008. All rights reserved. (Mean=5.7; SD=2.4) (1-4: 30%) High distress (5-6: 28%) (7-10: 42%) Low distress National Norms for Financial Wellness on PFW Scale © 1 2 3 4 5 6 7 8 9 1 0 5.4 6.9 8.2 9.2 14.5 14.2 13.8 12.2 11.4 4.2 0 . 0 2 . 0 4 . 0 6 . 0 8 . 0 1 0 . 0 1 2 . 0 1 4 . 0 1 6 . 0 Percentage

30% Are Failing Financially! (Scores of 1-4)

[object Object],[object Object],[object Object],[object Object],[object Object],Employee Personal Finances

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Employee Personal Finances (June 2008 data and reputable predictions)

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Don’t give employees a raise! Offer help with money management challenges. Employee Personal Finances “60% Live Paycheck-to-Paycheck” and Do Not Save Enough for Retirement

Research shows: 30-80% of ALL workers waste time at work on money issues How much time? 12 – 20 hours per month Employee Personal Finances

“ Employees with money problems are like sharks swimming around the workplace taking bites out of the bottom line”

[object Object],Employers ignore the elephant Employer Bottom Line

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Research Proves ALL These Factors are Correlated in the Ways Expected

[object Object],[object Object],[object Object],[object Object],Research Shows that Health and Personal Finances are Correlated

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Personal Finance Employee Education Foundation, 2008. “ Employer cost for no action is $750 to $2,000+ per employee!” Estimated Annual Costs of Ignoring Financial Illiteracy ©

Quality Workplace Financial Programs Rescue Employees and Employers Bottom Line

[object Object],[object Object],[object Object],[object Object],[object Object],What does not reduce employee financial distress and increase financial wellness?

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Bring together the basic financial resources to truly help employees. What DOES reduce financial distress and increase financial well-being?

[object Object],[object Object],[object Object],Financially Literate Employees are Engaged with Money Issues

[object Object],[object Object],It’s not a matter of money spent on financial education — it’s a matter of effectiveness! How Can Employers Save $750 - $2,000+?

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Results from Quality Financial Programs

[object Object],[object Object],“ PFEEF Advocates Best Practices”

“ Employers do not realize they can improve profits – and prove it– by helping employees improve personal financial behaviors” BIG POINT

The ROI (Benefit-Cost Analysis) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],ROI = 3:1

PFEEF Approach to Projecting Employer’s ROI “How Many Dollars Can an Employer Gain By Demanding the Best From Financial Providers?” ,[object Object],[object Object],[object Object],[object Object],[object Object]

Begin by Using PFW to Benchmark Employee Financial Health ,[object Object],[object Object],[object Object],[object Object]

PFEEF Researches Employer’s Return on Investment (ROI) ,[object Object],[object Object],PFEEF can:

Projected 1-Year Changes in 9 Variables ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

12 Additional Variables Could Increase Employer’s ROI ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Assumptions Behind Employer Costs and Projected Improvements ,[object Object],[object Object],[object Object],[object Object]

Assumptions of Projections ,[object Object],[object Object],[object Object]

Projected ROI of 3.29:1 for ABC Company * ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],KEY MESSAGES

[object Object],Conclusion About Employee Financial Literacy and Employer Profits It also is the right thing to do as stewards of employee well-being!

Information ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Benefits of Employee Education

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