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HR Outlook: Financial Wellness Programs


Is it an employer’s responsibility to help their employees manage their money better? Not really. But more companies are starting to realize the benefits of providing financial wellness programs to their workers.

According to a recent article in the Pittsburgh Post-Gazette, more employers are beginning to focus on the financial health of their employees. A handful of companies in the Pittsburgh area now offer workplace financial education to their employees. And it’s a trend that appears to be catching on with employers throughout the U.S.

HR departments are coming to the realization that the financial wellness of their employees can negatively affect their work performance. From the Post-Gazette –

“Human resource departments spend valuable time dealing with the garnishments from unpaid credit card bills. Employees may be distracted at work if they are getting calls during work hours from collection agencies. Financially stressed employees often produce less and call in sick more. Employees under financial stress also may start looking for a higher paying job to cover their expenses.”

On the flip side, employees who have their ducks in a row when it comes to their personal finances have a greater likelihood of prospering at work, thanks to lower stress and higher productivity. Hence, more companies are beginning to earmark dollars for the financial education of their employees.

Currently, about 4,000 companies offer the SmartDollar money management course to about 2 million employees throughout the United States. The course, created by personal money-management guru and talk-radio host Dave Ramsey, is based on material from his Financial Peace University (FPU) program, which is geared toward church and community groups. The SmartDollar program is designed for employees to access the program from their home computer, and the program content has a few other tweaks as well.

The focus of the SmartDollar program is to get employees out of debt, on a budget, and on their way to saving for retirement. This is much-needed guidance, as statistics say that 52% of Americans have less than $10,000 saved for retirement, 68% don’t prepare a monthly budget, and nearly half have more credit card debt than savings.

SmartDollar isn’t the only player in financial wellness sandbox. There are other companies out there offering similar services, and employers should do their homework when looking for a third-party resource to work with. Another option is for employers to find out if any of their current benefits providers offer financial wellness services. And if budgets are tight, employers can set up their own program using free personal finance resources. As part of a homegrown program, companies should check with local nonprofit organizations in their area to see if there are any available resources or free programs that employees can take advantage of.

Prosperity Now, formerly known as the Corporation for Enterprise Development (CFED), shares that financial wellness programs are sometimes geared towards higher-income employees with the goal of long-term savings for retirement. Low- and moderate-income workers may be more worried about short-term financial needs, like managing their daily expenses. If an employer identifies that short-term needs are more critical for their workers than long-term needs, they can consider other options like financial counseling/coaching, debt management services or short-term loans and accrued wage advances.

Bottom line – workplace financial education can benefit companies and help employees become more confident and capable with their money management. In the long run, it can help employees be a more valuable asset to their employers and drive greater success.