Vince Shorb is CEO of the National Financial Educators Council – an IACET Accredited Provider – and a leading financial wellness advocate.
As economic uncertainty continues to plague American workers, awareness of financial wellness programs in the workplace appears to be gaining momentum. Employee financial stress is likely to be high as people struggle with inflation, uneven compensation growth and rising levels of credit card debt. Many employers are responding by including financial health as part of a holistic approach to overall employee wellness.
Despite the ready availability of financial resources and information in the digital era, many individuals still lack basic money management skills. Some workers are looking to their employers to help. But even as organizations rise to meet this occasion, there’s a caveat—companies should choose carefully when selecting a personal finance educator. Personal finance is a unique subject to teach because each learner comes from a different background and set of emotional relationships with money. Teaching money management effectively requires specific expertise.
In this article, I explore trends in workplace financial education, why it’s needed and the qualities employers should look for when choosing a financial wellness educator.
Trends In Employee Financial Education
Employer perceptions of employee financial wellness have notably shifted over the past decade. According to Bank of America’s 2023 Workplace Benefits Report, “96% of employers feel somewhat or extremely responsible for their employees’ financial wellness.” However, only about 40% of employers said they offered workplace financial wellness programs in the Bank of America survey, while Transamerica Institute’s 2023 report puts the proportion at only 28%.
Recent data also indicates that workers are beginning to expect financial education resources from their employers. A 2023 global Nudge study indicated that the demand for employer-provided financial education benefits and tools increased by 62% that year.
At the same time, employers need to exact care when selecting financial wellness programs and evaluating instructor qualifications. For example, while retirement plan providers may offer financial advice, their instruction may not be impartial. According to the 2023 PwC Employee Financial Wellness Survey, employees across generations said they would most trust an objective financial educator not associated with specific financial products or a company’s retirement plan.
The Benefits Of Workplace Financial Education For Both Employees And Employers
In BrightPlan’s 2023 Wellness Barometer survey, 92% of employees reported being stressed about their finances because of economic uncertainty, yet only 18% of respondents had basic financial literacy. This deficiency in money management skills can have far-reaching consequences. Lost productivity due to financial stress is estimated to cost employers close to $200 billion a year. This suggests that employees who feel confident about their financial situations and security are more likely to show up for work and stay engaged on the job.
There’s evidence that workplace financial wellness programs can make a positive difference. TIAA’s 2022 financial wellness survey showed that workers who participated in such a program were twice as likely to have a high financial wellness rating than those who didn’t have access or chose not to participate. And research has drawn correlations between financial health or income and other health factors, including physical, mentaland relationship health.
Employers clearly have a vested interest in empowering their employees with financial knowledge and skills. Further, the rise in complexity of financial products and options has exacerbated the need for employees to become able to make informed money decisions.
However, how and by whom workplace financial wellness initiatives are presented can also make a powerful difference in their success. I’ve found that the quality of the resources and the financial educator directly influences employee outcomes. Organizations seeking workplace financial wellness programming should carefully evaluate both the curriculum and the instructor.
Eight Qualities Of An Effective Financial Educator
Teaching personal finance requires a unique set of knowledge and skills. The following eight training components are essential to prepare educators for the topic’s singular challenges:
• Financial psychology and behavioral finance principles: Each participant in a financial wellness program has a unique mix of experience, emotions and relationships with money. Educators should be trained to understand and incorporate these differences.
• Ability to adapt instruction to a diverse variety of learner needs: Teaching personal finance for maximum effect requires a deep understanding of learners and gathering regular feedback to guide necessary adjustments. Highly competent financial educators keep participants’ unique needs in mind when planning lessons and instructing.
• A mix of learner-centered pedagogies: Well-trained financial educators can seamlessly shift between the roles of educator, facilitator and mentor to enhance learning. They should be capable of guiding participants through course material, facilitating productive discussions and offering personalized support and insights.
• Evidence-based educational methodologies: I believe the lecture format is inadequate to reach learners with financial lessons. Appropriately trained financial educators incorporate teaching practices that instill practical skills, including project-based learning, case methodology, reflective activities and identifying reasons to learn.
• High degree of subject matter knowledge: Teachers should possess enough personal finance knowledge to confidently deliver the material. Those who don’t may skip topics, feel anxious about teaching or avoid answering questions.
• Inspiring learners toward higher-order thinking skills: High-quality educators should limit the topics they teach and spend more time on the most relevant lessons, thus engaging learners’ higher-order thinking skills.
• Ability to conduct learner assessments specific to personal finance: Personal finance instructors should keep learners’ long-term outcomes in mind and gather additional data to evaluate how they benefit from the instruction. Such measures might assess financial behavior change, sentiment and money management systems.
• Timely, applicable lessons: Learners’ ability to apply the lessons is a unique feature of personal finance instruction. Well-prepared educators prioritize lessons that participants can apply in making near-term decisions.
Conclusion
Workplace financial education is likely to become a cornerstone of contemporary employee wellness programs. I’ve noticed a growing recognition of the positive impact it can have on both employee well-being and organizational success. By investing in high-quality financial wellness resources and choosing well-prepared educators, employers can empower the labor force to make informed personal finance decisions. This result can lead to greater financial stability, improved productivity, and overall employee satisfaction in both their professional and their personal lives.
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