In a recent survey conducted by the Personal Finance Employee Education Foundation with the support of the Employee Benefits News, 91 percent of respondents cited employee financial literacy as being extremely important or important in reducing the vulnerability of the American economy to major economic crises. Given the recession, employers were asked whether they noticed an increase in garnishments—51 percent said yes; emergency loans—42 percent said yes; and 34 percent have seen an increase in requests for more time off to handle financial issues.
In addition to these results, 70 percent thought that the employer provision of basic workplace financial education is important or extremely important to the overall level of productivity in their organization and a majority (53 percent) thought employers who pass benefit costs on to their employees have a responsibility to provide ongoing financial education to help them make appropriate financial decisions.
While 88 percent of the respondents provide the required investment/retirement education associated with retirement plans, only 28 percent provide basic workplace financial education, defined as including budgeting, debt reduction and credit management. Several barriers were cited for providing basic workplace financial education. The cost is too high for 49 percent; 58 percent said employees would sacrifice work time to attend; and 71 percent noted that there were too many higher priority competing items. An even 50 percent weren't sure they could get upper management to buy into the provision of workplace financial education.
"The value of employee financial education is clear," said Judith Cohart, president and chief executive officer of the Personal Finance Employee Education Foundation. "The challenge is to overcome the barriers that prevent employers from providing this benefit to their employees."
For more information, visit www.pfeef.org.