11/19/2014 06:37 pm ET Updated Jan 19, 2015

Want Savvier, Less-Stressed Employees? Provide Them With Financial Education

Most employers would agree that financial education programs for employees are a good idea, but many may find it hard to justify enacting such a program in the workplace. After all, how do you determine ROI on this type of initiative? What are the end results? And, most importantly, what's in it for them?

Our recent report, A Closer Look: What's Working in Financial Education, sought to answer these questions and found that a variety of advantages exist, for both the employer and employee, when financial education programs are successfully put in place.

This includes having employees who are less likely to pull out their hair or bite their fingernails because they're more confident in their financial wellbeing and better prepared for retirement. And, less stressed employees provide long-term rewards for employers because these staff members are smarter about their future and more focused during work.

It's notable that of the 397 organizations that participated in the International Foundation's survey, more than two-thirds offer financial education. And when asked about stress, among employers offering financial education, only one-third said that their workforce is somewhat or very highly stressed, compared with 43 percent of respondents that do not offer financial education.

For some organizations, decisions about financial education are made based on the bottom line, but for many, it's done because it's the right thing to do. Notably, 61 percent of respondents with successful programs stated that it's important to improve participant/employee retirement and investment decisions. And, 45 percent of these employers believe it is the organization's responsibility to educate staff on pension and benefit options, encourage retirement savings and improve participant money management.

Employers with successful programs have also found that financial education doesn't need to be incredibly time intensive or sophisticated in order to be effective. Of the 170 respondents that said they have seen positive results, 84 percent offer programs during normal work hours. Education is offered in many ways: voluntary in-person classes, newsletters, emails, workbooks, online resources and courses, retirement income calculators and free personal consultations.

Convinced that a financial education program is right for your workplace? Here are four tips for a successful program:

1. Make a commitment and be patient. Organizations that have been providing education for several years report greater success than those just starting out.

2. Be willing to invest time and resources. Those with budgets designated for financial education will face fewer obstacles. They are also more likely to utilize more personalized educational approaches.

3. Diversify topics and formats. Include programs on investments, budgeting, savings, preretirement financial planning and retirement plan benefits. And offer a wide range of formats -- calculators, online resources, printed materials and consultation services.

4. Know your population and customize your education. Organizations that studied their employees' needs and offered education for life events like sending kids to college were more successful in their education.

Our survey results are promising and we're encouraged to see more and more employers recognizing the impact these programs have on employee wellbeing. We hope to see more organizations opt-in to this growing trend, creating financially savvy employees who are better prepared to tackle their day-to-day finances and issues of retirement in the future.

Julie Stich, CEBS, is the Director of Research for the International Foundation of Employee Benefit Plans, a non-lobbying educational association for those who work with employee benefits. Julie is responsible for the Foundation's original research initiatives and is an expert on benefit trends.

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