Workplace Literacy, what is it costing you?

I just finished reading a report by the Federal Reserve that documented the cost of workplace illiteracy. The report stated that most Americans would get the score or grade of  “F” if they took a basic financial literacy test. The productivity lost to the employer was huge. It starts with the lost of productivity because the employee did not sleep well or was being distracted by thoughts brought on by stress associated with financial matters. Employees also took out pay-day loans and loan against their 401K plans who struggled with finances. Many workers were getting  sued and had their wages garnished. The cycle just keeps continuing over and over. Some employees left jobs they loved simple for a small raise due to the financial pressure they were under do to making poor financial decisions

Most people had never received financial literacy training. If they had it was given to them when they were in High School or College. This is good, but like Geometry, if you don’t use it right away, you tend to forget about it.

Or, could it be that the person teaching the class on financial literacy was educating everyone to buy one of his or her financial products such and insurance or investments.

In a controlled study, workers who were taught in a classroom about personal finance at the workplace and were given one-on-one financial coaching were more productive and had less stress at work than employees who did not get financial coaching. In fact, in the controlled study of hospitals, there was a 70% reduction in malpractice laws suits at the hospitals who participated in the Financial Literacy program. Other benefits of the program were as follows:

Employer Benefits

1) Reduced cost associated with processing wage garnishments of employees

2) Increased participation in 401K saving by lower compensated employers that results in the ability to offer higher compensated employees more generous retirement benefits. 

3) More employees participate in flexible spending accounts result in lower FICA or Medicare taxes because the employee contributions are tax-free.

4) Less theft and embezzlement from the employer due to financial stress on employees.

5) Increased productivity due to the fact that the employee is not dealing with financial issues on company time.

6) Less absenteeism due to financial stress

7) Increased productivity due to lack of financial stress at home.

8) Reduced workplace violence

9) Reduced on the job accidents due to distractions and inattentiveness brought on by financial stress

Employee Benefits

1) Reduced late fees due to paying bills late

2) Eliminate the use of Payday loans

3) Reduced interest rates on credit cards 

4) Reduced credit card payments due to paying off debt systematically

5) Reduction of 401K loans that have high tax consequences

6) Increased savings

7) Better insurance coverage at lower costs

8) Increase wealth at retirement because of increased participation in retirement programs

9) Better overall health due to less stress

10) Lower divorce rate

If you are interested in inviting the team at Lighthouse Coaching to come to your facility and educate, equip and inspire your team concerning Financial literacy, contact us at fdavewilliams@mac.com or 
330-808-3905.