The study

The Consumer Financial Protection Bureau conducted a good practice review of financial education in the workplace in the USA.

The review is a resource for employers keen to promote employee financial wellbeing, by supporting employees to strengthen their money management skills. The review is structured as follows:

• Section One: introduces the business case for financial education in the workplace, such as increasing productivity and engagement.
• Section Two: provides an overview of relevant research findings and discusses the costs to employers of providing financial education for their employees.
• Section Three: presents case studies of financial wellness practices that employers have found helpful.

The review also notes promising trends, such as an increased focus on developing employees’ emergency savings. Innovative financial wellness programmes delivered by five companies are highlighted: Nebraska Furniture Mart, health care provider QLI, Staples, Goodwill of Central Texas, and Pacific Market Research. Delaware’s Stand by Me programme is also included as an example of public-private partnership operating effectively at scale.

Key findings

The report summarises employer good practice approaches towards employee financial education as follows:

• Listening to employees and establishing trust (including providing financial coaching).
• Encouraging employee peer-to-peer support.
• Utilising technology to lower training costs and deliver at scale. For example, mobile tools and online games can deliver financial wellness training effectively, and in a more engaging format.
• Forging or tapping into public-private partnerships. – For example, respected non-profits collaborating to engage private sector companies to provide advice on the content and delivery of financial education programmes.
• Incorporating financial wellness into employees’ induction programmes.

The review also highlights employers' and experts' views about the effectiveness of financial wellness programmes:

• Successful financial wellness programmes are cost-effective (such as those developed by public private partnerships or utilising mobile tools and games).
• Employees reported a range of benefits from engaging in financial wellbeing programmes, including increased engagement, lower absenteeism and reduced administrative costs.
• Financial wellness programmes can promote positive financial habits through coaching approaches.

Employers would welcome tools to better quantify the benefit of financial wellness programmes to employees and employers.

Recommendations

The review recommends employers adopt the following initial steps to improve their financial wellness programmes, such as:

• Encouraging employees to automatically allocate a proportion of their salary into a savings scheme.
• Supporting automatic contribution escalation (ACE) to retirement accounts.
• Providing employees with financial education linked to major life events, such as buying a new home, saving for emergencies etc.

Points to consider

• The study draws on a selection of published literature and interviews. However, the methodology used for inclusion and analysis in the review is not described.
• The examples of workplace financial education schemes include qualitative feedback on their benefits, but are not based on formal evaluation findings.

• Some of the terminology and recommendations are US-specific. However, the review does identify broader good practice principles that could be more widely transferrable.

Full report

Financial wellness at work - full report