Employer-Sponsored Education Programs and Incentives to Improve Employees' Financial Lifestyles

Members of every employer’s workforce will have severe financial problems that can affect productivity. In addition, many employees have either saved very little or feel that they cannot afford to save any money toward retirement.

Employers can provide incentives for employees to attain good financial health, just as they do for physical health. Employers can also set up financial education programs that are more comprehensive than the usual retirement planning programs and address issues at every stage of employees’ lives. The often neglected needs of lower income employees should be included in program planning. Advantages of such programs to employers include lower stress for employees, less time lost on the job due to handling financial problems, and a more loyal workforce.

Few employers would question the proposition that when employees are healthy, long-term operational costs are reduced, primarily though lower medical claims and fewer hours lost to illness. Thus, employers find it in their interest to promote employee health. According to a study by Hewitt Associates, 39 percent of employers are offering workers incentives to help them become more health conscious.

Health is related to money matters, too. Many workers with poor health have had financial worries contribute to or even cause their health problems. It is obvious that workers with serious and expensive health problems are often distressed about their finances, but many workers with moderate to poor health are also very concerned about personal finances.

These comments suggest some important questions. Do workers who are distressed about poor personal financial wellness have higher medical claims than workers who have better financial wellness? Do workers who are distressed about money matters use more hours of sick time than others? Do workers with poor personal financial wellness spend substantial work hours attending to such matters?

Although we do not completely know the answers, the questions are intriguing because research indicates that these observations about workers are accurate. For that reason, smart employers are considering the idea to offer workers incentives to improve their financial lifestyles. The logic is that as the personal financial wellness of workers increases, the employer’s cost of operations will decline.

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