Mainstreaming Comprehensive, Integrated Financial Literacy Programs as an Employee Benefit
MainstreamingComprehensive, Integrated, p , g ,Financial Literacy Programs as an Emplo ee Benefit Employee By Estelle Ople Osorio Managing Director Biz Whiz Business Training and Consultancy @ p firstname.lastname@example.org http://www.bizwhiz.com.ph
• When we say GO!, go around the room, introduce yourself, and ask if any of them fit the descriptions on the card. Ask them to write their name under the description that they agree with.
• You will each receive a bingo card with descriptive statements.
• Each person can only sign your bingo card ONCE. Bawal umulit!
• Sh t BINGO once you have at least Shout h tl t one person’s name under each description. d i ti
B I N G O I love shopping, I am not able to We have a I have anI do not have an and I tend to buy save a portion of financial emergency fundemergency fund. on impulse. my salary education that will last at regularly. program. least 6 months. I have some Money causes I do not have a I am debt-free! I have lifecredit card debt. me stress. budget. g insurance.I do not have a I do not know BONUS I consistently I am invested in plan for anything about Your name save a portion of stocks. retirement. retirement stocks. stocks my salary. salary I have no I like going to the I worry about I have a financial I am invested in financial plan casino to unwind. providing for my plan to reach my mutual funds or whatsoever. h t child’s education. hild’ d ti goals and d l d dreams UITFs. UITF I help others I owe money to I don’t know what I am saving up for I am saving andwithout helping some friends / a mutual fund is. my children’s planning for my myself. relatives. education. retirement.
Financial illiteracy has beencalled “the most glossed over and ignored worker issue today. today ” -- Metlife 8th Annual Study of Metlife, Employee Benefit Trends, 2010
Reasons to Invest in Financial Literacy Programs as an employee benefit1.1 It is the right thing to do do.2. It is less expensive to educate workers on how to manage their money and maximize their employee benefits than it is to give them higher salaries. l i3. Financial difficulties negatively impact employee productivity. productivity
• Most Filipinos do not take Retirement Planning seriously.• Most do not know or understand what their company’s policy is on retirement benefits.
The question isn’t at what age isn t I want to retire, it’s at what income. ~George Foreman
“The “Th worksite i th perfect place to provide k it is the f t l t idbasic, unbiased financial education and training for f employees. When employees learn about l Wh l l b t basic saving, debt management and investing concepts, they can immediately apply these t th i di t l l thconcepts to their health care, retirement savings, and personal savings plans.” d l i l ” – The Wellness Councils of America “Financial Wellness Goes Mainstream”, 2007
Reason #2:It is less expensive to educate p workers on how to manage their money and maximizeemployee benefits than it is to p y give them higher salaries.
“If employees do not have the financial skills to maximize the benefits being provided to them, they will: push for more benefits be less financially benefits, secure, and be more likely to be dissatisfied with their compensation ” compensation. --- (Martha Priddy Patterson 1997) Patterson,
It sIt’s not about what you earn earn.It’s about how much you can keep.
Earned $40 M in 2009 2009.Almost filed bankruptcythat same year.Still owes the IRS $7 M in taxes!
Bought a house in New York, Rhode Island, NewOrleans, Newport Beach, San Francisco, LasVegas, Bavaria Germany, England, the Bahamasand many other places.
That includes two castles: one in England, and the other in Germany.This is a picture of theSchloss Neidstein castlewhich Cage bought in g g2007. It has 28 rooms and395 acres of forest.
He purchased 22 automobiles-- including 9 Rolls Royces and a $500,000 Lamborghini Miura SVJ.That does not yetinclude his privateGulfstream jet ($45M), aswell as 4 yachts.
He also had… • A $1.6 M comic book collection, • A dinosaur skull worth $$276,000, • A penchant for $2,000 $2 000 snacks at k t caviar hotspot Petrossian, Petrossian • And had given at least $3M to charity charity.
It sIt’s not about what you earn earn.It’s about how much you can keep.
HR Issue Impact to Employer How Financial Wellness Programs Can Address the IssueTurnover and Costs for replacing highly Financial education can improveLoyalty to trained professionals can employee loyalty by increasing theirEmployerE l exceed a f ll year’s salary. d full ’ l satisfaction with pay and benefits. ti f ti ith db fit 61% of employees who are Employees who understand and very satisfied with their are satisfied with their benefits also feel a very compensation and benefits are less strong sense of loyalty to likely to leave the company for a their employer, according to higher paying job elsewhere. Metlife’s 10th Annual Study of Employee Benefits report.Productivity Employees dealing with Financial wellness programs can financial stress spend help employees resolve their most company time dealing with pressing financial issues so they their financial woes at work -- are no longer operating in a state of as much as 20 hours per financial emergency and can be month per employee, employee more productive at work. work according to the Personal Finance Employee Education Foundation.
Society for Human Resource Management survey says: M t• 49% of HR professionals said employees are % p p y stressed by an “overall lack of monetary funds to cover their personal expenses.”• 24% said money woes are l di to id leading “employee absenteeism and tardiness.”• 22% of HR professionals attribute worker money woes to “credit card debt” and the same number also cited “home mortgage payments.”• 12% of HR professionals said “education expenses expenses” were causing workers’ financial workers stress that was noticeable in the workplace.
“Financial literacy training makes employees and managers more knowledgeable. A spin- spin off is that employees feel taken care of. And with greater financial literacy and confidence, they are usually more productive while working and less distracted b fi di ” d by financial woes.” i l » Ri H i HR M Rita Harris, Manager, G Greenberg F b Farrow
Generic Financial Literacy Programs vs.Comprehensive Financial p Literacy Programs
Generic Financial Literacy Programs • Usually short talks (1 to 2 hours) on general principles you should follow to become more fiscally fit (Save. Live within your means. Avoid debt.) ) • Gives mostly information on how to prevent financial distress, but offers little concrete advice t th d i to those who are already i di t h l d in distress. • May mention investment options (stocks, bonds, bonds mutual funds) but do not discuss how to start investing. • Good as an eye-opener but rarely results in y p y behavioral change.
Comprehensive Financial Literacy Programs• Can be short talks, but tackling specific issues in depth (I.e. saving up for retirement, getting out of debt, investing in stocks, tti t f d bt i ti i t k bonds or mutual funds).• P Program ideally would cover: id ll ld – Preventive information –RRemedial assistance and advice f th di l i t d d i for those experiencing financial crisis – Productive information for those considering financial opportunities
Sample Topics for Preventive Education• How to spend less and save more• Creating financial plan f your f t C ti a fi i l l for future• Setting up an emergency fund• Saving for your children’s education• Planning for your retirement• Protecting yourself and your family with insurance
Sample topics for those in financial stress or distress• Getting out of debt• How to get emergency loans• Taking charge of your finances
Sample topics for those considering financial opportunities• Stock Market Investing for Beginners• Investing in Mutual Funds for Beginners• Fixed income instruments for Beginners• Forex trading for Beginners• How t Start a Business with S ll H to St t B i ith Small Capital
Capital GainsC i l G i (MER)2003 2007 2010 2012P8.73 P90.45 P 190 P 224 TOTAL CAPITAL APPRECIATION:
Global Trends andInternational Best Practices on Financial Literacy Programs
Best Practices• Make sure company policy and benefits are integrated into the module or program.• Educate throughout the year.• Actively promote company financial literacy programs t your employees. to l• Offer one-on-one financial coaching and advice to your employees employees.• Measure results by conducting a financial fitness test before and after the program. p g
Case Studies • IBM has its “Money Smart” program for its US employees. This program provides in-person and web-based seminars, one- on one on-one planning sessions and online tools that cover issues such as managing debt and housing expenditures. • More than 60,000 employees have already participated in the program.
Case Studies: Mountain America Credit Union • 5 weeks after their training program: – 98% h d an had emergency account compared to 61% at the beginning th b i i – 84% knew their net worth compared to p 12% in the beginning – 11% reduction in consumer debt
Steps in Implementing a Successful Financial Literacy Program in your Company• Secure the support of senior management and iron-out any budgeting issues for the program.• Ask employees what topics they would like to have covered.• Invite speakers and/or training p p g providers to conduct the talks. Make sure speakers customize module to include company policies and to answer your employees’ needs.
Steps in Implementing a Successful Financial Literacy Program• Choose presentation type, such as pre- or post- working h ki hour sessions, l i lunch and l h d learn sessions i or teleconferences / webcasts.• S l t date/s and ti / f the program. Select d t / d time/s for th• Promote the program through internal communications four to six weeks before the first session. Send a reminder the week of the presentation. presentation At the end of the presentation presentation, promote the details for the next presentation.
“Knowledge is only potential power. Real Knowledge power is when you put your knowledge into action. To achieve financial freedom, you need to take action.”
Thank you!For inquiries about our comprehensive financial literacy and other training programs please feel programs, free to call us at 975-9559 / 623-9601 or e-mail us at email@example.com :)