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Do Your Employees Need a Crash Course in Financial Education?

Could basic financial education for workers help increase productivity? One recent survey suggests that employers think so.

In a survey conducted by the Personal Finance Employee Education Foundation, 91 percent of respondents considered employee financial literacy important in reducing the vulnerability of the American economy to major economic crises. And a majority of responding employers (70 percent) thought that the employer provision of basic workplace financial education is important to the overall level of productivity in their organization.

With employers noting an increase in emergency loans and employees requesting time off to handle financial issues during these recessionary times, a little education might go a long way. Financial education for employees can include budgeting, debt reduction and credit management.

Only 28 percent of respondents, however, provided basic workplace financial education – in contrast with the 88 percent who do provide the investment/retirement education associated with retirement plans.

Employers listed several barriers to providing this type of basic financial education: cost; the belief that employees would not sacrifice work time to attend; and too many higher priority competing items. In addition, half of respondents doubted they could get upper management to buy into this provision.

“The value of employee financial education is clear,” said Judith Cohart, president and CEO of the Personal Finance Employee Education Foundation. “The challenge is to overcome the barriers that prevent employers from providing this benefit to their employees.”

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