Businesses should teach workers about finances, state advises

Businesses have plenty to do to train workers, from showing
workers the basics of what companies do to teach workers how to operate complex
machinery. A four-year-old state program has been trying to promote the idea of
teaching them one more thing: how to handle money.

The Pennsylvania Office of Financial Education (OFE), an
office of the state Department of Banking, works with businesses and schools to
develop programs that make workers and students more financially savvy.

With a five-person staff, OFE works closely with others to
foster financial education. OFE
encourages teachers of grades kindergarten through 12 to incorporate age-appropriate
financial concepts into lesson plans. For example, while teaching mathematics,
teachers can develop exercises using credit-card statements and calculations of
interest on loans.

“Financial education has to be available during your entire
life in places where you live,” said Heather Tyler, a spokeswoman for the
Department of Banking. “The financial learning process needs to be ongoing
because of continual changes in financial regulations and options.”

Tyler
said improving the financial education of today’s students would enhance the
financial skills of tomorrow’s workers, while improving employee education can
improve bottom-line business performance.

McClarin Plastics Inc. in Hanover,
York County, is a manufacturing firm that
provides financial education as part of its in-house training. Roger Kipp, vice
president of marketing and engineering, said increasing employee financial
knowledge improves the bottom line and helps company’s 185 employees manage
their personal finances.

McClarin uses lean manufacturing to reduce waste and
increase efficiency.

“Employees quickly learn that lean techniques involve a lot
of measuring, and if you don’t understand economics, you don’t understand why
the measuring is important,” Kipp said.

“As part of our manufacturing economics course, employees
are provided a template that they can use to help them with their own
finances,” Kipp added.

Throughout the course, employees are shown the correlation
between business and personal finances, he said. The course has been taught for
about four years and has been shared with local companies.

Kipp said he believes that the course, taught with the
active participation of senior management, enhances internal business
communications. Employees complete the course better equipped to handle their
own finances. McClarin benefits as employees complete the course with a better
understanding of the business’ vision, the need for business profitability and
the role of competition in the marketplace, Kipp said.

“Communication develops understanding, and understanding
leads to cooperation, which builds trust,” Kipp said.

OFE keeps track of studies that show employee stress caused
by financial concerns can increase absenteeism and job turnover and decrease
productivity. A 2007 study by Ameriprise Financial found stress increasing
about employee-benefit decisions. Sources of financial stress for U.S. employees
were found to have increased significantly since 2005. The highest stress
factors were saving for retirement and paying for health care in retirement.

OFE has been working to fill a void. When McClarin saw a
need for and developed its training course, it started from scratch.

“We couldn’t find an existing course,” Kipp said.

The government has done more in the past five years to
increase awareness of financial education, Tyler said. Two years before OFE was created,
a similar office was developed within the U.S. Department of Treasury. OFE
works closely with that office and financial-education offices in other states,
sharing ideas and resources.

OFE continues to develop new ways to promote the effort.

“There is no one-size approach to financial education in the
workplace, as employers have different needs and resources,” Tyler said. “We want to help them do what
makes sense to them.”

OFE recently surveyed employers statewide to find out how
many businesses are providing financial education and what areas they are
covering. The survey is an expanded version of a survey done by Wisconsin’s
financial-education office.

About 70 percent of respondents are doing some financial
training, said Becky MacDicken, OFE’s workplace financial-education specialist.
Most of that is related to benefits packages.

“Most employers who are not doing it can’t find the time to
plan for or implement financial training or don’t know who to turn to,”
MacDicken said.

OFE has ideas businesses can use for providing financial
education to employees at little or no cost, such as telling them about the Web
site and helping human-resource staff find useful resources (see “Financial
education a budget,” this page).

OFE is also concerned with the financial-education of state
employees. It conducted a pilot program in 2006 that provided nearly 30
training sessions to 400 Harrisburg-based employees from four agencies.

Feedback from participants of the pilot program confirmed
assumptions that financial planning in the workplace makes people feel better
about themselves as individuals and employees. More than 80 percent reported
they had taken one or more steps to improve their financial future when
surveyed three months after the last training session.

Working with the state’s Office of Administration, OFE is
working to develop online financial training for state employees.

–

Financial education
done right

A lot of well-run financial-education programs share similar
characteristics, including:

• A clearly articulated mission, defining values,
  priorities and goals
• Targeted outreach
• Adequate resources to design a course, develop materials
  and train instructors
• Evaluation and follow-up to determine participants’
  application of the education and to improve the course
• Accessibility. Make sure there’s time off for employees
  to attend training
• Relevant curriculum, geared to participants’ backgrounds
• Community partnering. Use a local bank to design the
  course and supply teachers.

Source: Institute for Socio-Financial Studies, as reported
in Workforce Management, January 2005

–

Financial education
on a budget

Here are a few low-cost ways to educate employees about
managing their finances

Here are a few low-cost ways to educate employees about
managing their finances

• Tell employees about www.moneysbestfriend.com. The
  Pennsylvania Office of Financial Education (OFE) will provide bookmarks
  promoting the Web site at no cost. As appropriate, include a link to the Web
  site from employee computers’ desktops or business intranet.
• Visit www.moneysbestfriend.com, and run a ZIP-code
  search to find local, trustworthy community-based financial-education
  providers, such as university cooperative extension offices. Make the list
  available to employees.
• Contract with an organization that designs and promotes
  (without a sales pitch) workplace financial-education programs. OFE does not
  endorse specific programs but suggests that the Web sites of the Heartland
  Institute of Financial Education, the EDSA Group and Financial Knowledge might
  be useful.
• Ask your health-benefits provider if it offers, as a
  wellness-program service, financial education to reduce stress and promote
  health. If so, consider adding that service to your plan.

Source: Pennsylvania
Office of Financial Education