Academic journal article The Journal of Consumer Affairs

Understanding the Impact of Employer-Provided Financial Education on Workplace Satisfaction

Academic journal article The Journal of Consumer Affairs

Understanding the Impact of Employer-Provided Financial Education on Workplace Satisfaction

Article excerpt

The present study examines the linkage between workplace financial education and workplace satisfaction. Data gathered from a national sample of employees of an insurance company favor the hypothesis that employees who participate in workplace financial education more fully understand personal finances and recognize how financial literacy impacts their future financial expectations. In addition, employees who gain considerable literacy in financial matters and confidence in their future financial situation are also more likely to be satisfied with and supportive of their company. Implications of these results for non-work settings and for consumers in general have also been developed.


In recent years, there has been significant growth in the number of U.S. workplaces offering financial education programs to their employees. This phenomenon provides an excellent opportunity to assess the effects of these programs on employees' financial literacy, financial expectations, and satisfaction with the employer. Being able to quantify these effects helps justify continuous promotion and improvement of adult financial education in the workplace.

Already, nearly half (47%) of the workers who responded to a recent Retirement Confidence Survey said they received education materials or attended seminars on retirement planning and saving offered by either their employer or their retirement plan provider. In addition, nearly one-third of the workers reported that an employer provided access to retirement investment advice (Employee Benefit Research Institute 2004). Encouraged by the positive effects of education on retirement saving and investing, the professional literature shows that some employers have widened the scope of financial education in the workplace (Employee Benefits 2004; Pomeroy 2003). These programs are targeted at improving an employee's level of financial literacy and analytic ability, thus preventing or resolving financially stressful situations. Despite acknowledgment that education in the workplace impacts employee financial expectations (Garman, Leech, and Grable 1996) and their commitment to their employer (Eisenberger et al. 1986), surprisingly little empirical research has been directed toward examining these effects, especially their causes and consequences. Most studies focus on traditional employee benefits like health care coverage and retirement planning and evaluate outcomes from the employer's perspective (Lengnick-Hall and Bereman 1994; Williams and MacDermid 1994).

Several notable exceptions have recently appeared in the literature from a group of researchers at the former National Institute for Personal Finance Employee Education at Virginia Polytechnic Institute and State University. One study reported specifically on the development and testing of a conceptual model for personal financial health in a workplace environment (Joo 1998). This study suggested that employees are highly interested in comprehensive workplace financial education and concluded that workplace financial education may significantly improve personal financial health. More recently, Kim (2000) found that financial well-being indirectly affected workplace satisfaction. However, Kim (2000) concluded, "a more comprehensive workplace financial education program is needed in future research designs to measure the effectiveness of workplace financial education on personal finances" (p. 301).

The present study improves Kim's experimental model, which was limited to assessing the impact of a one-time, 90-minute session presented to white-collar workers in selected states. The present study, utilizing a national sample, assesses the impact of a 3.5-hour-long educational session preceded by an hour-long informational session. During the informational session, participants were given a preview of and invited to participate in a more intensive, 3.5-hour educational session.


The overall objective of the present study is to identify the effects of employer-provided financial education on employee financial literacy, employee expectations for their future financial situation, and their satisfaction with the employer. …

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