Measuring the Impact of Workplace Financial Education and Advice: A Pre-post Design Virginia Tech’s National Institute for Personal Finance Employee Education Jinhee Kim Presented at the 5th National Conference on PFEE November 9, 1999
SECURA Insurance Companies located in Wisconsin, Michigan, and Indiana
Pre-and post-assessment design
Pre-assessment in February 1999
Financial education seminars in March
Post-assessment in June (three months after the seminars)
One-on-one financial planning advice counseling sessions in July
Advice survey in August and September
White, some college education
Average age of 39 years
With current employer (1/2 less than 5 years and 1/5 over 15 years)
Median household income $60,000 - $70,000
Individual Character-istics Financial Attitudes, Knowledge Behaviors Financial Well-being Personal Finance-Work Conflict Work Outcomes Productivity Absenteeism Work time wasted Organizational commitment Pay satisfac- tion Intention to leave Workplace Financial Education T he Kim Model of Workplace Financial Education, Financial Well-being, and Work Outcomes
Attitudes Behaviors Knowledge Financial Well-being Personal Finance Work-Conflict Performance Rating, Absenteeism, and Pay Satisfaction Structural Equation Model
Financial Well-being Predicts Productivity
This study of white-collar workers demonstrates that financial well-being directly predicts employees’ performance ratings, pay satisfaction, conflicts between work and money matters, and absenteeism.
It also indirectly predicts job loss and organizational commitment.
Impacts of Workplace Financial Education and Advice
As a result of the education and advice, employees:
were more confident about their personal finances and their investment decisions,
changed how their assets were allocated within their 401(k) retirement plan,
increased the amounts of their 401(k) contributions and personal savings,
reduced debts, and
sought additional advice from a financial planner
Would Employees Like Additional Financial Education and Advice?
If their employer pay for it, 75% would like a financial checkup from an outside provider
One out of five respondents did seek further professional financial advice
Three-quarters say they might need a more comprehensive financial advice
90+% would be willing to make a co-payment for a comprehensive financial analysis IF government paid some of the cost
Key Research Elements of Workplace Financial Education
1. Financial wellness
2. Retirement plan participation
3. Benefits participation
4. Workplace financial education
5. Workplace financial advice
6. Health care costs
7. Health (stress, physical, emotional)
Key Research Elements of Workplace Financial Education (cont.)
8. Knowledge (of financial literacy)
9. Attitudes (and confidence about financial
10. Behavior (on financial issues)
11. Productivity measures -- absenteeism,
work time wasted, job turnover,
performance rating, etc.
12. Commitment to job and organizational goals
13. Demographic variables
What is Needed Now?
Research - with your help - is needed to prove that financial education positively impacts financial well-being and productivity.
Then, one day soon employers will provide workplace financial education to their employees because they are convinced that it improves workers’ personal financial wellness as well as the organization’s bottom line (e.g., absenteeism, turnover, health care costs, worktime wasted on money matters).
This scenario will not happen without convincing research or without your help.