Amanda Thurston
8/31/12
Literature Review 1 of 5
Financial Education – Stress = Improved Productivity
By: Joanne Sammer

Online Source: HR Magazine, Jun2012, Vol. 57 Issue 6, p71-76, 6p http://ezproxy.mssu.edu:2065/docview/1018548263?accountid=12570 The author of this article takes an in-depth look at how financial education provided to employees can benefit the company. Managers have become more aware that financially stressed employees tend to have suffering performance at work. Employees become less focused on their job duties under extreme stress, which can affect a firm’s bottom line by preventing company goals from being reached and more employee errors. This article also explains that stress to employees can cause increases in medical insurance premiums because of stress related illnesses and can cost companies thousands of dollars due to high absenteeism and turnover rates. Businesses that have deployed a financial education program have seen large improvements in overall company morale, turnover rates, job performance, and absenteeism. Financial education is providing companies who use it with a competitive advantage. “"There are six or eight things we do that are difficult but not impossible for our competition to match overnight,” Dean says, "Certain benefits have become commodities that everybody has and that are not differentiated anymore. Financial education makes you stand out" (Doug Dean, SPHR, chief human resource officer of Children's of Alabama). Research has indicated that employer-sponsored financial education improves personal financial outcomes which have led to improved work outcomes. A study conducted by Personal Finance Employee Education Foundation found the return on investment to be $6.60 for each $1 invested in financial education, a return based on 470 employees completing the program. McLeod Health, a company offering financial education to employees reported a total return on investment of $569,133. These returns came in the form of lower turnover rates, better job performances, less work time lost, and lower absenteeism. Financial education programs can be conducted and offered in several methods. Some employers offer the education strictly through EAP services; others offer training on-sight in the evenings or at lunch and even Saturday classes. There are programs in place for some companies that offer the training through video and the internet, which provides employees the convenience of completing the education when they have time and also allows employee spouses to be engaged in the education. No matter which way the education is conducted, there are undeniable benefits to employees and employers alike. The role HRM plays in these financial education programs is extensive. Human resource managers are the voice and front line for such program. HRM must first inform employees of the programs availability; managers must also set up the training seminars, and evaluate the costs and benefits of the programs. With such extensive positive research of financial education programs, it’s hard to believe that currently only fifty-two percent of companies offer such programs to employees. In my opinion, as the economy continues to struggle, businesses will start offering more programs if the companies have concern for their bottom line.