Giving Financial Education to Employees
Posted October 20th, 2014
Many businesses help their employees with a range of offerings – such as health coverage, retirement plans, professional development programs, and other things. But there is one area that is ignored when it comes to employee assistance, and that is financial education.
Financial concerns are a major source of stress for many employees. It is not always a matter of making enough money, but how to go about handling the money that is made, how to save it, spend it, invest it.
Companies can go a long way toward helping employees maintain their peace of mind by offering them help with financial management.
For example, 401k’s. During the 401k enrollment period, most companies explain the advantages of this retirement vehicle and encourage employees to invest in it, but that is all they do. One way to help employees financial health is to go further. You can give them more information about the importance of contributing to 401k’s, through videos, for example. You can show them how contributing has helped current retirees, and offer other incentives to get them to invest.
Another way to help is to automatically enroll employees, so that they will have to take action if they don’t want to invest in the 401k. At most places, the procedure is just the reverse – employees have to take action to get themselves enrolled, and so many simply pay no attention. Studies have shown that if they have to take action of opt out, many more do end up enrolling.
You can also help educate employees on how to invest their money. You can have a financial advisor – one who is not trying to sell anything or get business – come in and go over investing basics with workers, such things as asset allocation, handling risk, how mutual funds work, how to compare different types of investments, and some terminology common in investing.
Other instruction that will be helpful is about financial basics – budgeting and being disciplined with their money, about avoiding taxes or deferring taxes, and about inflation
A good way to start is to find out what financial concerns your employees have, so that you can tailor your instruction to their needs.
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