Why Workers Want to Learn About Money at the Office

By Dan Kadlec

August 23, 2016

Buried in a recent report from Schwab is the startling finding that almost all workers want financial education on the job. Some 85% would embrace a broad financial wellness program; 70% want at the least professional, personalized advice on how to deploy their 401(k) plan assets.

We’ve come a long way from the days when most individuals figured they could manage their own money and prepare for retirement. Decades of underperforming 401(k) plans, and a financial crisis that set back millions of savers, have put a spotlight on how difficult this is to do.

People need help—and they know it. The Schwab findings underscore the personal financial stress that most workers experience on a daily basis. The findings suggest that nearly all adults are in over their head and are looking to their employer for answers.

Many employers have responded with easy fixes, such as defaulting 401(k) plan participants into target-date funds and automatically escalating employee contributions every year. They have also added online planning tools. But it isn’t enough. Most workers need and want a full-fledged financial wellness program, which includes advice and education on everything from setting budgets and paying down credit cards to saving for retirement.

Employers didn’t ask for this responsibility. But it behooves them to supply it. Financial stress is a leading cause of absenteeism and exacts a huge toll on productivity. Money issues are a distraction at work for 28% of employees, PwC found. And the percentage is climbing. Nearly half spend three or more hours at work each week dealing with or thinking about issues related to their finances.

Yet financial wellness programs can make a huge difference. With financial education, the percentage of those confident in handling their money affairs jumps to 74% from 44%, Schwab found. Nine in 10 workers value their 401(k) plan and would consider rejecting a job offer at company where the plan doesn’t measure up, Schwab found. It wasn’t always that way. It has taken decades for workers to appreciate the value of a 401(k) plan.

Full-on financial wellness programs today are where 401(k)s were not long ago: creeping into every workplace but not yet seen as critical. But that’s already changing. Financial education will become a benefits staple in just the next few years, and that’s good for workers, employers, and the economy as a whole.

Posted in Adults on August, 2016