How Continued Financial Education in the Workplace Relieves Employee Stress
posted by Fisher 401(k) April 19, 2017
It’s National Stress Awareness month, and we’re thinking about one of the biggest burdens to modern employees: financial stress. According to the Consumer Financial Protection Bureau, 7-in-10 employees say financial anxiety is their most common stressor.1 In the workplace, this can be toxic, which is why so many employers make efforts toward team-building and employee appreciation.
But research by the International Foundation of Employee Benefit Plans found that only 23% of surveyed employers offer continued financial education for their employees.2 By partnering with a 401(k) service provider that offers financial guidance, one-on-one meetings, and ongoing education for your employees, you can help relieve one of their biggest sources of worry—without adding to your own workload. Below is a list of ways you and your 401(k) service provider can better serve your team.
“The good news is the better people feel about retirement, the more sleep they get.” -Dave Ramsey3
Your 401(k) provider should schedule regular in-person and small group meetings with your employees. Making finances less intimidating for employees is the first step in helping them, and your 401(k) service provider should work with you to do so. Your provider can help employees review their finances and put together a strategy for saving. The key to this strategy is that it’s repeated. Follow-up meetings create more security for your employees, help them feel supported, and also encourage employees who aren’t currently participating to dip a toe in the water themselves.
A key takeaway from Transamerica’s 17th Annual Retirement Confidence Survey is that, “Workers who have a retirement plan, whether a defined contribution plan, defined benefit plan, or IRA, are far more likely to feel confident about having enough money for retirement. Indeed, they have saved more than those without a plan, have taken more steps to prepare for retirement, and feel less stressed about retirement preparations.”4 Data shows that simply having that 401(k) plan in place will help reduce anxiety levels in your office, but when your 401(k) service provider goes above and beyond, your employees reap the benefits.
Employees should also have the option to attend webinars, watch 401(k) videos, or find reading materials through your service provider that will help them feel more confident about their 401(k) decisions and services. These can be used to offer more specific information on topics like investing basics. However, they should never take the place of the individual attention we described above.
There are a lot of retirement calculators available online. These calculators make projections based on employee income, monthly retirement contributions, expected retirement age, current age, current retirement savings, and expected retirement costs.
Despite the availability of online retirement calculators, many people don’t take advantage of these. According to the Transamerica Retirement Confidence Survey, “52% of Generation X workers say that they guessed their retirement savings needs. Just 12% used a retirement calculator or completed a worksheet.”5 A 401(k) service provider that encourages use of these free online tools can change this statistic for your employees and help them take more initiative for retirement saving.
Empowerment through Education
Unfortunately, employees who don’t understand how their benefits work might choose not to participate. According to research conducted by Fisher Investments 401(k) Solutions, 77% of employees would rather work for an employer who offers educational 401(k) support for their employees over a 401(k) with no additional support.6 Your 401(k) service provider can educate your employees so they know how to contribute and aren’t uneasy about where their money is going once they do. This is equally true of any additional benefits you may have built into the plan, like an employer match, profit sharing, or a Roth option.
National Stress Awareness Month is a great opportunity to think about how to reduce your team’s biggest stresses. The right 401(k) service provider can reduce both the short-term and long-term financial stress of your employees. With a better idea of what they can expect from retirement, data shows that employees will feel more relaxed and empowered. That will in turn lead to an increase in their productivity and their loyalty to the company. Don’t stress about it—let a 401(k) service provider help by continuing your employees’ financial education.
6Fisher 401(k) Solutions Wellness in the Workplace Study, pg. 8