A recent study revealed how much of a negative impact financial concerns have on employees’ on-the-job productivity. Those who are struggling financially report being highly distracted on the job 12.4 days per year on average[1]. That’s one day a month! How would you like to recover that lost productivity? One way to help reduce that stress is by
promoting good financial fitness with the members of your workforce.
The last week of February is recognized nationally as “America Saves Week”, an annual opportunity for organizations to promote good savings behavior, and a chance for individuals to assess their own savings status[2]. Each day of “America Saves Week” has a different focus, but as a Plan Sponsor, you can use these same strategies all year as a framework for a solid financial education program.
Let’s examine this year’s America Saves Week strategies one by one an
d see how they could be implemented at your workplace over the course of the year.
1. Saving Assessment
Start the year by providing your employees with the resources they need to evaluate their complete financial picture. Your retirement plan’s record-keeper may have educational literature or online tools to help employees identify areas that need attention.
To be even more effective, bring a Certified Financial Planner™ professional onsite to meet with people individually. That professional will help people identify their goals, evaluate their progress in meeting those goals, and create a game plan toward a more secure financial future. Employees who know where they stand financially will be less likely to spend time at work worrying about their finances and more time focused on the task at hand.
2. Save at Tax Time
Once your employees have identified the areas that need attention, tax time is a perfect season to kick-start their efforts to save. Promote a “Refund It Forward” campaign, challenging employees to split this year’s tax refund, dedicating half toward their first savings goal.
Invite a financial professional to speak at a company meeting, demonstrating how much of a difference a significant initial contribution can make as the start of a regular savings strategy. Then reinforce the message with multiple communication tools – posters, emails, paycheck inserts, and follow-up announcements at future company meetings.
3. Save Automatically
People who use an automatic strategy for saving are more likely to succeed than those who don’t. In fact, two thirds of pre-retirees who have an automatic saving vehicle are confident it will help them become more financially secure[3]. So whatever your employees are saving for – a car, a home, an education, retirement, or just for a rainy day – help them succeed by providing them with an automatic way to set aside money from their paycheck toward that goal.
Make sure your HR department is familiar with the procedures to sign people up for automatic transfers to savings accounts, and then promote that service as a way to accumulate money for the future. Choose a day to have HR representatives available in the lunchroom or other public area specifically to sign people up for the automatic savings program.
4. Save for Emergencies
For workers who live paycheck to paycheck, even a small interruption in cash flow or a small-unexpected expense can be a major problem and a major source of distraction at work. But a December 2012 Consumer Federation of America survey found that only 37 percent of low-to-moderate income households even had a savings or money market account[4].
Encourage employees to save for emergencies by providing basic financial education on budgeting, credit and debt, and finding money to save. Live workshops by a Certified Financial PlannerTM professional, followed by individual consultations with attendees, are an effective strategy to help employees experience the peace of mind that comes with a fully-funded emergency fund.
5. Pay Off High Interest Debt
The average U.S. household with debt carries $15,762 in credit card debt, spending $2,630 on credit card interest alone each year[5].
Studies show that when employees pay off their debt, they are more satisfied with their level of pay at work and less likely to look for a higher paying job elsewhere.
At this point, focus your financial education efforts on debt reduction strategies. Help your employees understand the true cost of consumer debt, and educate them on ways to find more money they can use to get that debt paid off.
6. Save for Retirement
One-third of workers age 60+ and 19% of workers ages 55-59 believe they will never retire and will work until they die or are too sick to work.[6] Your company-sponsored retirement plan provides these workers with the best possible way to change their financial future.
Make sure your plan is designed well, so that it encourages participation and rewards higher levels of salary deferral. Then devote the necessary resources to educate your workers about the benefits of participating in your plan. For those who are already participating, show them the value of increasing their rate of deferral.
Content + Delivery = Results
“America Saves Week” provides great ideas for the content of your financial education efforts for the year. But the methods you use to communicate this message are dependent on the size, the industry, the available resources, and the culture of your organization.
Electronic media, such as emails and notices on your company intranet, are a good way to make information available to the greatest number of people, but they are the least effective at generating results. Adding printed material, such as posters, letters, or paycheck inserts, may help increase the effectiveness of your education campaign somewhat.
The best way to communicate your message is by combining electronic and print media with live personal interactions. Group presentations and workshops grab people’s attention and deliver information more effectively. Individual consultations then help them apply that information to their particular situation. Using all these methods together to communicate the messages of “America Saves Week” throughout the year can be a powerful and effective strategy to help decrease financial stress with your employees and increase workplace productivity.
For help designing and implementing your company’s financial wellness campaign, contact Pension Consultants Inc. The Certified Financial Planner™ professionals on our
RetireAdvisers® team are ready to assist you.
[1] https://globenewswire.com/news-release/2016/03/01/815835/0/en/U-S-Employees-We-Will-be-Worse-Off-Than-Our-Parents-in-Retirement.html
[2] See the America Saves website at www.americasaves.org
[3] http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6969
[4] http://www.americasaves.org/for-savers/set-a-goal-what-to-save-for/save-for-emergencies
[5] http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
[6] https://www.wellsfargo.com/about/press/2015/few-years-difference_1022.content
Pension Consultants, Inc. is registered with U.S. Securities and Exchange Commission as an investment adviser.
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