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Put financial literacy education to work: Employers and employees benefit

The economy might be improving, but research shows employees are not confident about their own financial situations.

In fact, according to the Federal Reserve, American workers spend an average of 28 hours per month calculating or stressing over their finances. It’s a situation that can cost employers $5,000 a year per employee in lost productivity.
Help for struggling employees could be right outside their cubicles if workplace financial education is adopted.
Employers can start a program to teach employees healthy financial habits. Workplace programs can be done inexpensively and offer huge rewards to employees and employers alike.
 
Teaching money smarts
Financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial stability. Financial literacy can make employees more productive and less vulnerable to economic uncertainty, but only about half of employers say they provide even the most basic workplace financial education.
By offering employees opportunities at work to improve their financial savvy, companies can help their staffs achieve financial well-being.
Employers can cover many different topics to help educate their employees. It is a tremendous opportunity to increase productivity, engagement and loyalty. Topics could include any one, or several, of the following:
• Budgeting and spending plans
• Retirement planning
• Changing family structure: marriage, divorce, new baby
• Setting financial goals
• Planning for emergencies
• Paying for college
• Managing credit
• Getting out of debt
• Company 401(k) or other defined- benefit options
• Insurance
• Estate planning
• Elder care
 
Where and when?
Cost should not be a deterrent for employers. You don’t have to give everyone a day off from work and book an expensive conference facility to offer financial literacy.
At the most basic level, financial literacy courses can be offered by an in-house human resources staff member or by an outside expert during a brown bag lunch or after-work session. PICPA members are available to provide group training free of charge through their Money & Life program offerings. Some employers offer one-on-one counseling at the office during work hours.
According to research from The Principal Financial Group, employees with access to one-on-one counseling become more engaged in their financial affairs and save more, among other positive outcomes.
One note of caution: Any time people employed at a company help educate fellow employees, it’s important to provide a clear disclaimer saying the information is being provided by individuals for educational and information purposes. The “trainers” should make it clear that everyone should check with qualified professionals before making any important financial decisions. You need to state clearly that the company will not be liable for any action an employee takes based on peer-to-peer communication.
 
A CPA can help
Still on the fence as to whether workplace financial literacy education is right for your organization? Consider research that points to financial literacy as a critical factor in optimizing employee performance and helping them to understand and appreciate their benefits.
Employees’ personal financial difficulties can be personally and professionally consuming. Employers can be a part of providing solutions. A PICPA member can help through the Money & Life program.
Visit www.IneedaCPA.org to request a CPA speaker or learn more about having a financial literacy program at your company, place of employment or community organization.

For more information about Pennsylvania Institute of Certified Public Accountants (PICPA), visit www.ineedacpa.org.

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