Paper Highlights ROI for Financial Education

Financial wellness programs can cut stress and increase productivity in the work force, new research suggests, especially when employees receive more holistic financial education.

An analysis from Purchasing Power, a voluntary benefits provider, suggests employers that invest in workplace financial education programs can eliminate employee stress and boost productivity—but strong outcomes require in-depth education programs that promote lifelong financial planning skills.

“Employers may introduce a new benefit or two that put a Band-Aid on their employees’ financial stress or help with a short-term financial issue, but only a financial wellness education program is going to address the real problems and begin to change behavior,” says Elizabeth Halkos, chief revenue officer at Purchasing Power.

According to “Money Smarts: Helping Employees Make the Grade,” the firm’s white paper, most people in the work force today say they feel at least some level of financial stress—and that this stress impacts daily productivity. While Millennials (ages 18 to 34) appear to be the most stressed financially compared with Generation X and the Baby Boomers, the data suggests that a good percentage of all three generations in the work force have financial struggles.

The analysis finds employers that offer workplace financial education to employees gain a double advantage: they generate good will among employees, and potentially boost retirement readiness and help employees stay focused on their work, among other benefits. Purchasing Power says many employers already provide wellness and employee assistance programs alongside other benefits to support their employees’ overall quality of life. However, these programs don’t always give employees the skills needed to address the complexities of their unique financial situations, leading to lackluster outcomes in stress reduction or productivity improvement.  

The analysis finds many in the work force could use some financial education in budgeting and emergency preparedness. Nearly half of Millennials (47%) lack emergency savings of at least $2,000, for example, while 39% of Generation X (ages 35 to 49) and 25% of Baby Boomers (ages 50 to 68) say they do not have at least that much saved for unexpected expenses.

With so many adults in poor financial health, Purchasing Power finds children aren’t learning the basics of effective money management: Over 62% of people ages 15 to 18 recently tested by the National Financial Educators Council received either “D” or “F” on the 2014 National Financial Literacy Test. Without proper guidance from parents, kids are far more likely to become adults with money issues, the paper finds.

In a more positive finding, 40% of employees surveyed said that they would take advantage of more financial wellness education opportunities made available through their or their spouse’s employer. Looking at that interest on a generational basis, Purchasing Power finds 45% of Millennials would take advantage, while 43% of Gen Xers and 32% of Baby Boomers would do the same. 

The types of financial wellness education that employees say would help them, along with the percent interested in that type of education, are:

  • Saving for retirement – 37%;
  • Paying off debt – 33%;
  • Investment advice – 37%;
  • Budgeting – 21%;
  • Personal finance coaching – 14%;
  • Saving for children's education – 14%;
  • Buying a home – 12%; and
  • Understanding and building credit – 11%.

A sizable majority (58%) of employees surveyed say they feel it is appropriate for workers look to their employers for help in achieving financial security through employee benefits. The analysis finds this interest from employees goes beyond health insurance benefits and retirement programs, and extends into issues such as debt management and budgeting.

“They want access to financial education resources, financial coaching, ways to understand, build and monitor their credit, budgeting information, and more,” the paper explains. “There’s a gap between what’s needed and what’s offered.”

Assessing the current workplace financial education landscape, Purchasing Power cites a Society of Human Resources Management (SHRM) survey from 2014, which found a little more than half of companies offer financial education. Non-profit organizations are more likely than privately-owned/for-profit companies to offer this benefit to their employees, the paper notes.

According to the SHRM study, 25% of organizations reported facing obstacles in providing additional financial education. The greatest challenges among organizations that offer financial education to their employees are the cost (33%) and the lack of interest among staff (28%).

Purchasing Power says the hallmark of an effective financial education program is orientation around specific objectives: The goal of financial wellness education programs should be to change specific behaviors to address short-term needs and plan for the future, the paper explains. Goals tied to specific metrics (such as emergency savings account funding) will be easier to track and easier to assess from an employer return-on-investment (ROI) perspective.

“To be successful, the programs that employers implement must be able to be customized for each employee’s situation,” researchers add. “Employers can construct [the wellness program] themselves, making various online tools and resources available to employees, or they can utilize non-profit organizations, consulting firms, or other company offerings to provide services which include online education and more.”

Either way, the first step must always involve some sort of financial assessment for the individual employee, which would include outlining their current financial situation, identifying areas for improvement and prioritizing action steps. Setting goals and implementing actions for their specific situation are the roadmap for success in changing their behaviors, the paper concludes.

The survey was conducted online in the U.S. by Harris Poll on behalf of Purchasing Power from December 15 to 17, among 2,016 adults ages 18 and older. Purchasing Power is a voluntary benefit company providing employee group purchase programs. More information is available at