Why Employee Financial Literacy is Good for Business

Whether you’re a financial professional trying to counsel business owner clients, a firm owner looking to maximize benefits for your workforce, or a major company seeking to improve corporate culture, guiding employees toward financial wellness can seem daunting — but the good news is that not only are there free tools and programs that can provide a starting point into increasing financial knowledge, but the process itself has enormous upside potential to your business’s bottom line. Let’s examine what those benefits are…and where you can find programs that meet both your employees’ unique needs and your business goals.

Why Is Employee Financial Literacy Important?

According to recent research, members of Gen Z see financial services as the #1 most desirable field to work in¹; and while there are many reasons for this, it is also true that many members of the rising generation want more out of a job than just a paycheck. They want to feel good about the job they’re doing, secure in their position, and work for a business that appreciates them as an individual and wants them to do well.

That said, money can very often be one of the top stressors in people’s lives, and many are not properly educated to handle issues like credit, debt, retirement, and other vital financial matters on their own in an increasingly complex financial system. A 2024 study by the TIAA Institute showed a cross-section of U.S. adults failed to even score 50% on average on a quiz of basic financial literacy and knowledge²; and our own 2023 Retirement Income Literacy Study demonstrated that retirement is an area of special urgency, with quiz-takers averaging a dismal 31% on a test of basic retirement planning knowledge.³

Clearly, financial education is a problem that needs to be addressed — and it goes without saying that employees who are better educated about financial matters are more inclined to make better financial decisions. Increased financial literacy can boost morale among your employees, as well as improving job satisfaction. Furthermore, being able to tell prospective employees that your company offers complimentary financial wellness programs can help bring top talent to your table, as well as keep the talent you do have for longer.⁴

But, you may ask, what’s in it for me? Let’s explain the benefits from a business standpoint.

How Employee Financial Literacy Boosts Your Business

When discussing the benefits of investing in employee financial literacy for a business, increased recruitment is an obvious benefit, as noted above; however, an even more valuable benefit may be the increased retention of the experienced and talented employees already present. With many statistics pointing to a problematic retirement and attrition “cliff” in financial services, anything that improves retention can cut down on the need to spend time and money hiring and training new employees, thus directly benefiting the bottom line.

Speaking of which, more educated employees are, generally speaking, happier and more productive employees: studies show 54% of employees facing financial difficulties may suffer from distraction, low production, and chronic absenteeism — all of which can negatively affect your business and your customer experience. Furthermore, less financial stress can also lead to better health, and in turn, lower disability and healthcare costs for your firm. Organizations with high employee morale and engagement tend to see 21% higher profitability across the board.⁴

Want to really get down to brass tacks? Instituting financial literacy programs also has regulatory and data benefits; certain types of programs can boost a company’s community impact scores while still delivering real value to employees, and the data the company gets from whatever financial wellness program they partner with or run can provide real-time insights into the issues employees are facing — as well as what the company can do about it.⁴

Where You Can Find Employee Financial Literacy Programs

Now that you’ve seen the very real benefits employee financial literacy programs can bring, the next question is: how do you find one? Of course, one could always build a program through a company intranet portal, standalone webinars, or small group coaching; some important points to remember when setting up such a program include using a universal assessment to identify employee pain points, meeting employees where they are on a diverse array of financial needs, scaling your software to deliver the program effectively en masse, and regular promotion.⁵

But let’s be honest: you’re here because you’re seeking a quick and easy solution to your most pressing needs on employee financial literacy for either yourself or your clients. And as a nonprofit institution dedicated to serving the financial services profession and society for nearly 100 years, The College is here to partner with you and make it happen. Our consumer financial education offerings include:

• A Spectrum of Legacies: A program focused on philanthropic goals and legacy planning, best for financial professionals and clients to work through together.
• Resilient Finances — Thriving With Disability: For those newly on disability or dealing with life-altering circumstances, this program offers invaluable insights on how to manage healthcare planning and expenses, disability benefits, and more.
• Know Yourself, Grow Your Wealth®: Available in English and Spanish, this trailblazing financial education and empowerment program invites your employees into a series of modules that will increase their knowledge of all the cornerstones of financial wellness including credit, debt, housing, taxation, investing, and more.
• The Retirement Course™: For employees who may be looking for reassurance on their retirement strategies, this program focuses on finding purpose and meaning in retirement, retirement strategy and psychology, long-term care considerations, and how to ensure their money lasts as long as they do.

All our programs are free and open to the public — so if you or anyone you know is interested in partnering with us on one or more of these employee financial literacy opportunities and licensing versions specific to individual goals, contact us today and see how The College can help you enhance financial wellness and business outcomes.