Financial Success, One Employee at a Time: Helping Employees Develop Better Money Management Skills

By Patton, Carol | University Business, July-August 2011 | Go to article overview

Financial Success, One Employee at a Time: Helping Employees Develop Better Money Management Skills


Patton, Carol, University Business


"LEAVE YOUR PERSONAL problems at the door." There IL dare probably some managers who still support the antiquated belief that employees can shut off personal problems like a light switch once they set foot in the workplace. But how can a worker ignore the fact that he or she has lost a home, maxed out credit cards, drained the savings account, or stopped being able to pay the electric bill?

Over the past several years, higher ed institutions have enhanced their employee assistance programs (EAPs) with basic finance courses and resources, everything from how to develop a family budget or pay off credit cards to offering emergency grants. Whether or not an employee's financial issues are a school's business doesn't seem to matter to those implementing these programs. They've developed ways to help employees minimize financial stress so they can be more engaged, focused, and productive at work.

There is some evidence that points to the need for schools to do more. According to MetLife's 9th Annual Study of Employee Benefits Trends, conducted in 2010, approximately one in four employees in higher education feels confident in the ability to make the right financial decisions for themselves and their families. Only 27 percent feel in control of their finances and almost half live paycheck to paycheck. More than 60 percent indicated being behind in retirement savings and nearly nine out of 10 are not confidant they know how much income their savings will generate once they retire.

These results don't come as a big surprise to HR professionals. Many have taken action to help guide employees on a path of financial success, with the assistance of companies like Fidelity, Vanguard, and TIAA-CREF, which offer services from employee financial counseling and online tools to educational seminars.

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At Columbus State Community College (Ohio), which supports about 1,300 employees, HR considers financial wellness part of its overall wellness program, says Tim Wagner, vice president of HR. The team delivers seminars on how to buy a house and manage stocks, bonds, mutual funds, household debt and credit cards, and has a dedicated staff member for retirement guidance. This individual offers a variety of employee-saving tips that use holidays or personal occasions as triggers to take action. For example, every New Year's Day, she may suggest reviewing your investment portfolio or investing your pay raise.

Some schools are trying to offer more aggressive investment returns. The University of New Haven (Conn.), for example, turned to Fidelity to offer employees a different investment platform, says Caroline Koziatek, vice president of HR at UNH, which employs 657 people.

Since some employees are not financially literate, HR analyzes financial data from its broker to identify specific topics for employee seminars. "If we see 20 70-year-olds investing in risky assets, we would do some education on when is the right time to go in a bond market or, if too many young employees aren't signing up with Fidelity, then we would hold a seminar like, 'Too Young to Plan for Retirement?,'" Koziatek explains. "Our [seminars] are a little more tailored to the trends and behaviors of our collective group. We don't just do vanilla."

LESS IS MORE

Many retirement plans offer a variety of vendor and investment options. But too many choices tend to be overwhelming for employers and their workforce.

Two years ago, Kennesaw State University (Ga.) dropped the number of its vendors from 15 to three for 403[b] and 457[b] retirement plans to meet new IRS compliance standards, shares Karin Elliott, benefits manager. "There was no way we could keep track of 15 different vendors," she says. HR also sent payroll contributions to each vendor. With just three, it's easier to choose and build stronger relationships. She says employees now have a better selection of mutual funds. …

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