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Pennsylvania Bank Chief Says Financial Education Can Pay Off for Business
By Alton Gary Simpson
HARRISBURG, PA-According to Pennsylvania secretary of banking Steve Kaplan, businesses in the state could achieve higher productivity, lower health care costs and reduce absenteeism by providing financial education for their employees. He also invited businesses to participate in a survey of financial education in the workplace.
"Money problems at home can have a negative affect on an employee's work performance and that affects the company's bottom line," said Mr. Kaplan. "By investing in financial education, businesses can help foster a healthier and more productive workforce."
Research by E. Thomas Garman, professor emeritus and fellow at Virginia Tech University, and an expert in the field of workplace financial education, noted that one in four working adults - nearly 30 million people - are suffering serious financial distress.
"These employees are unhappy with their finances and they worry about money, debt and bills," said Mr. Garman in a speech on how employers can profit from increasing their employees' financial literacy. "They worry about having enough money to live on once they retire. They often lack confidence about their abilities to manage personal finances. Many do not even have hope that they might one day be able to catch up financially. People at all income levels experience distress about financial matters."
He added that his research showed that as many as 80% of workers in financial distress spend time dealing with financial issues instead of working and half say their financial worries are having a negative effect on their health. These health problems can result in higher insurance premiums for companies and more sick days used by workers. Mr. Garman concluded that financially illiterate employees do not make the best decisions for themselves or their employers. He also noted that according to his research, every dollar an employer spends on financial education returns a gain of $3 or more.
The Pennsylvania Office of Financial Education is conducting a survey of nearly 7,000 business leaders and human resource managers to gain information about financial education in Pennsylvania workplaces. It is available at the website www.moneysbestfriend.com until March 14.
"The Office of Financial Education wants to learn more about Pennsylvania employers that offer financial education and be a resource to businesses that want to get information or start a program of their own," said Mr. Kaplan. "The survey will also help us gauge awareness in the business community of the benefits of financial education for workers."
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