Financial education in the workplace has become an increasingly common benefit as employers seek ways to help employees navigate life beyond their job.¹

Studies show that employees are eager to learn ways they can become more financially sound. A PricewaterhouseCoopers’ Employee Financial Wellness Survey found that 72% of financially stressed employees say that they would be attracted to companies that care for their financial well-being.²

Financial education programs traditionally center on savings and retirement planning-unsurprising considering financial education in the workplace is commonly led by investment providers whose ultimate goal is to get assets under management.

Despite employee eagerness to receive financial education in the workplace, most feel that their needs are not being met. In fact, a Willis Towers Watson’s 2021 Global Benefits Attitude Survey found that only 36% of employees feel that employer-provided resources are meeting their needs.³

By injecting some of the more intimate components of engagement into traditional financial education, we find an opportunity for plan sponsors to bring about significant, meaningful, positive impact to their employees’ lives through financial wellness.

Engagement Defined

In general education terms, the concept of student engagement can be traced back to the 1800s when first coined by John Dewey.⁴ The Glossary of Education Reform defines student engagement as “the degree of attention, curiosity, interest, optimism, and passion that students show when they are learning or being taught, which extends to the level of motivation they have to learn and progress in their education.”⁵ A financial education program founded on the concept of engagement captures employee attention, piques curiosity and interest, leads them to think in terms of possibility, motivated by passion to create change in their financial lives.

A person who’s struggling to make ends meet may not believe saving is at all possible. A younger employee may feel they have other immediate priorities versus saving for retirement. Another employee may believe it’s too late for saving to make much of a difference.
Engaging employees requires messaging that attracts the naysayer, overcomes limiting beliefs and inspires action to work towards healthy financial goals.

In addition to providing valuable information, there are several, key components of engagement an employer can use to build a financial education program that demonstrates a true commitment to employee financial wellness. Providing a positive work culture can result in higher retention rates, which is especially noteworthy in education, where competition for talent is fierce.⁶ Research proves that businesses with a strong learning culture see retention rates 30 to 50% higher than those that do not.⁷

Engagement Components

Start with an assessment
In defining the components of engagement the notion of meeting employees where they are is central to engagement success. By providing programming that speaks to the individual situation in a manner they can understand and relate to, an employer has the opportunity to connect to the employee on a meaningful level and help them create desired positive changes in their financial wellness.

To understand where their employees are, a plan sponsor must engage in active listening to know their population, not only at a demographic level, but also assessing the individual’s own needs, barriers, skills and motivation.8

The Consumer Financial Protection Bureau suggests an assessment like their Financial Well-Being Questionnaire to help assess a person’s perceptions about their financial well-being.

Understanding the individual mindset can help identify gaps and motivations to customize the financial education approach.

Make it entertaining

In today’s digital age of instant gratification, compounded by COVID-era video conference fatigue, a clipart-laden PowerPoint presentation is barely enough to hold attention, much less inspire change.

Bringing a more creative flair to financial education can go a long way to capture and hold the audience’s attention. Humor, storytelling, video, gifs, and memes can be used to break up the monotony of a budgeting presentation. Motivational guest speakers can bring about a change of pace in programming. Adding a rewards program or a challenge can engage employees. Even adding simple animation to presentations increases visual interest.

If you have ever caught one of my presentations, you have inevitably caught me laughing, most likely at myself. A bit of personality can make an amazing difference in presenting even the driest subject matter. While money is no laughing matter, putting your audience at ease can help make them more receptive to the material being presented.

A trusted source

Financial education from a neutral outsider can seem cold and impartial. Even worse, when financial education comes from a perceived salesperson, guards go up and red flags go off. People generally do not like being sold to. There is an inevitable skepticism and distrust. But, when financial education comes from an employer, it has been shown to increase participation in and contributions to savings plans⁹. Given that employers are viewed as a trusted source, an employee may be more relaxed and better able to receive the intended message.¹⁰

An employer initiated financial education program presented consistently on a variety of topics addressing employee needs demonstrates a commitment to maintain a leadership position of stewardship for the financial health of your employees. That demonstrated commitment yields trust in the education, the products, solutions, and resources offered.

Relevant to Your Audience

A person’s relationship with money is a deeply ingrained personal habit based on their individual experiences, environmental and genetic factors.¹¹ So individualized are personal finance habits that free donuts in the break room are rarely enough to overcome limiting factors to promote the conscious action of opening a retirement savings account, much less the subconscious beliefs that form the basis of the individual’s relationship with money. If it were that simple, free donuts would have gyms everywhere packed to the brim, diets would go unbroken, every bed would be made, and laundry would be put away straight out of the dryer.

The most effective way to change behavior is to create new subconscious beliefs.¹² To overcome limiting beliefs, financial education programming must meet the audience where they are while addressing the issues they are facing, the things they struggle with, the decisions they must make and the contributing complicating factors.

Diversity, Equity & Inclusion

There is a statistical disparity in wealth among racial groups. A 2019 Survey of Consumer Finances put out by the Board of Governors of the Federal Reserve System found that the average Black family in America had one-eighth the median wealth of the average white family—$24,100 versus $188,200, with Pacific Islanders, American Indians, Alaska Natives and Hispanics falling in between.¹ The wealth gap leaves many minority families at an economic disadvantage, in greater financial stress and with less financial security.

Employer-sponsored retirement plans further exemplify the incredible disparity among racial groups. The Global Benefits Attitude Survey found opt-in rates for those plans at 60% for White employees, 45% for Black employees, and 34% for Hispanic employees. Sufficient income, funds offered in the plans, default enrollment and financial literacy are all found to contribute to the disparity in participation amongst races.⁵

The findings of the Global Benefits Attitude Survey emphasize that when providing financial education programs, employers should:
• consider the diverse needs of their employees
• engage with employees to hear what those needs are
• provide timely, relevant education on how best to meet those needs
• provide actionable tools and resources.

In doing so, employers can support employees on their financial journey, help them reduce financial stress and boost healthy outcomes.

Financial Stress

72% of all stress is caused by financial issues.¹⁴  The impact in the workplace is tangible. Financial stress is known to cause health issues, decrease productivity and increase employee absenteeism.¹⁵ The 2020 Global Benefits Attitude Survey showed that 65% of financially struggling employees report suffering from anxiety or depression, versus 19% of those who say their finances are fine. The financially stressed are six times more likely to assume addictive habits, such as poor diets or alcohol abuse. They are also less likely to take up healthy habits like regular exercise or to get enough sleep.¹⁶

Financial stress can lead to poor decision making.  Studies show that financial stress can even lower a person’s IQ by 13 points.¹⁷ Imagine a teacher trying to prepare her class for an exam, but her concerns that she is unable to qualify for a mortgage or save for retirement are keeping her up at night, stealing her focus and affecting her performance at work; and that has trickle-down effect on her students. Plan sponsors have the opportunity to develop financial programming that helps employees like her find a path to home ownership or plan to pay for college education.

• The Retirement Advisor Council suggests financial wellness programs should address root causes of employee financial stress. Some of those root causes include, but are not limited to:
  • Increased housing prices and extreme housing shocks
  • Increased student loan and consumer debt that employees are carrying throughout their working lives and into retirement
  • Market volatility and its relation to retirement savings
  • Rising health care spending, which has outpaced any increase in employee wages over the last decade
  • Periods of high and prolonged unemployment
  • Increased longevity of loved ones and escalating caregiving needs
  • The changing nature of work and increasing integration of technology, requiring new skill sets to advance in current jobs and be marketable for other jobs
  • Increased lifespan in retirement that needs to be funded, as well as a greater possibility of needing long-term care.¹⁸

Financial education that meets employees where they are, with active employee listening protocols, that effectively addresses real time concerns can have an immediate positive impact in their day to day lives. It allows them to focus on the service they provide to you and the community.

Accessible

The Retirement Advisor Council notes the importance of accessibility in a financial education program.¹⁹ Regardless of financial literacy, wealth or earnings, all employees should have access to a financial education program. Also, the Council encourages using a combination of media – print, in person, digital, video, webinar, podcasts, audio – to deliver the content.

By providing a variety of media to deliver content, the employee chooses the manner that is most comfortable and familiar and removes barriers to their education. It also gives the opportunity for an employee to absorb the message when it is delivered several different ways, reiterating the underlying lesson and forging the memory.

Actionable

Financial education programming should be simple and actionable. In designing a program, plan sponsors should make financial concepts easy to understand and linked to real-world situations; otherwise, it may be difficult for participants to apply.

In a study of financial education training ADOPEM found simplifying financial education into concrete, actionable steps may be more effective at changing consumer business practices than concept-based accounting training.²⁰

The Consumer Financial Protection Bureaus states that information is more likely to be absorbed if it is presented in concrete steps they can be followed.²¹ Breaking goals down into steps with manageable objectives creates an actionable plan, making it easy for employees to follow while on their journey to financial wellness.

Plan design can also play a major role in moving employees into action. In fact, automatic enrollment into savings programs has become a valuable tool for plan sponsors to increase participation rates.²² Making it easy for people to save by automating savings overcomes the obstacle of continuously putting forth the necessary effort and attention to make a change.

Measurable

The Retirement Advisor Council also gauges the effectiveness of a financial education program by key metrics broken down into three categories: objective measures, engagement measures and success stories.²³

As opposed to subjective measures like employee opinions or attitudes, the Council advises using measures that can be objectively tracked. Participant credit score, the amount of debt or retirement readiness are examples of objective data that can be measured and tracked to determine program efficacy.

Engagement metrics not only measure the number of employees who access the program, attend sessions, and meet with advisors and coaches, but also whether a program participant is new versus a repeat participant which helps to determine efficacy. Also, it determines whether a participant adheres to the program over time. This is particularly useful in programs that use financial coaching as a resource for education.

Statistical evidence that documents program use, participant adherence to the program and the effectiveness of the program can be collected in success stories; a third measure of program effectiveness.

Other measures of success are employee and manager surveys that measure changes in morale, job satisfaction, turnover rates, absenteeism, satisfaction with the financial wellness program and financial stress.²⁴

Conclusion

Engagement is exponentially beyond education alone. True engagement requires information that is engaging, along with an employer that is equally engaged in demonstrating a commitment to the financial wellness of their employees.

The rewards of a successful financial education program are two-fold. Not only do employees benefit from meaningful, impactful positive change to their quality of life, their financial wellness translates to increased productivity for employers.¹

A well-strategized and developed financial wellness campaign focused on engagement translates to overall better outcomes.

1 – Financial Wellness Will Be the New Priority Following the Pandemic

2 – 2021 PwC Employee Financial Wellness Survey

3 – Willis Towers Watson/2020 Global Benefits Attitude Survey conducted October 2020

4 – Dewey’s educational philosophy

5 – https://www.edglossary.org/student-engagement

6 – An Approach to Using Student and Teacher Data to Understand and Predict Teacher Shortages

7 – Employers fear 4.5m workers could be on the move this year

8 – Best Practices for Financial Literacy and Education at Institutions of Higher Education

9 – Weighing the Effects of Financial Education in the Workplace

10 – Wellness Programs Earn Their Place in Human Capital Strategy

11 – Nature or nurture: What determines investor behavior?

12 – How to Use Your Unconscious Mind to Achieve Your Goals

13 – Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances

14 – “Speaking of Psychology: The stress of money”

15 – Infographic: Rethinking financial wellbeing for today’s diverse workforce

16 – Willis Towers Watson/2020 Global Benefits Attitude Survey conducted October 2020

17 – “Poverty Impedes Cognitive Function”

18 – Financial Wellness Programs Need to Include a Way to Measure Success

19 – Financial Wellness Programs Should be Engaging and Include Objective Measures

20 – “Keeping it simple: Financial literacy and rules of thumb.”

21 – Implement effective financial education in the workplace

22 – The Secret to Getting Workers to Save More for Retirement

23 – Financial Wellness Programs Should be Engaging and Include Objective Measures

24 – Financial Wellness Programs Need to Include a Way to Measure Success

25 – Wellness Programs Earn Their Place in Human Capital Strategy