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Benefits of Employee Financial Education
"...analysis shows that employers gain a return on investment of 300 percent or more"
Dr E. Thomas Garman, Personal Finance Employee Education Foundation
Some of the benefits you can expect from a comprehensive program include:
Increased productivity as you remove the distraction that financial stress creates
Increased retention of those who may otherwise try to solve their financial problems by changing jobs for higher money
Decreased absenteeism among previously financial stressed employees
Increased engagement and advocacy as employees feel you care about their wellbeing and that your company is a great place to work
Return on Investment (ROI)
Productivity Benefits
Fifteen per cent of workers improving their productivity by 15 minutes per day is like adding an extra half an employee to your team.
You can calculate the productivity benefit using the following formula (15 minutes per day is approximately 3.13 percent of an eight hour day.)
Productivity Cost =
% distracted employees x Number of employees x Average salary p.a. x 3.13%
For example, if you have 500 employees where the average salary matches the average earnings in Australia of $59,000 per year then the productivity benefit is approximately $140,000 per year.
The larger your workforce, the higher the average income and the more widespread the distractions and stress, the bigger the potential increase in your profits.
Turnover Benefits
Many corporate analysts suggest turnover can cost your organisation between one and two times an employee’s salary in lost productivity, advertising, recruiting and retraining costs.
Using the above example again, reducing turnover by 1 percent by retaining just 5 people could increase your profits by between $295,000 and $590,000.
This benefit is much easier to achieve than you may think by hand picking participants for your program. You could target your most valuable employees and those you know are stressed or distracted by money.
To more deeply understand how you benefit read more about the depth of the problem of financial illiteracy and stress.
Employees Value It
A 2008 survey by Mercer found that Australian employers significantly underestimate the demand for financial planning support among employees. Employees ranked it as their 11th most valuable benefit, whilst employers expected employees to rank it as the 27th most valuable.
If you provide the benefit your employees will value it more highly than you expect.
(Source: “Benefits Outside the Square”, Mercer, 2008)
Next Step: Design a Program
A highly profitable program needs to be comprehensive, available to all employees and ongoing. You can however be profitable by targeting a specific outcome with a clearly defined, hand picked group of employees.
To design a program structure that achieves your priority outcomes and fits your budget book a complimentary consultation now.
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Matt Hern trades as FINDRE
(Empowered Wealth Pty Ltd t/as)
ABN: 21 592 525 720
Phone: 08 9467 7320, Fax: 08 9463 7848
PO Box 259, Bull Creek, Perth, Western Australia 6149, Australia
Website: www.MattHern.com.au
Blog: www.Money-Guide.com.au
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