What is “Return-On-Investment” or ROI? The dictionary defines ROI as “the ratio of the yield on a unit of a product to the cost of the unit.” In other words,

Is it worth what I’m paying for it?

The Financial Impact of Employee Turnover

Financial education can help employees to take control of their personal finances. How can this impact an employer? Employees will learn to value and maximize the use of company-sponsored benefits and learn to manage money to meet goals – both short and long-term. This work-life benefit shows your employees that the company cares for their well-being and has been shown to improve morale.

On average, 20% of the American workforce is struggling financially to the extent that it negatively impacts their productivity at the workplace. This demonstrates itself through sick leave abuse and high employee turnover. Many experts have estimated employee turnover to be 12-20%. Experts disagree on the exact cost of employee turnover (shown as a percentage of wages) though on average the general consensus estimates the cost to be near 100%.

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Cost to the Employer of Financially Unfit Employees

Many companies also pay the price in loss productivity because of poor workplace morale. A financially unfit employee is easily distracted and tends to be consumed with their financial concerns. Consider that 33-50% of workers with credit delinquencies report that they spend time at work dealing with money matters. On average, such workers waste 20 hours per month – that’s 25% of their work time – dealing with personal financial matters. In a study conducted by the Center for Financial Well-Being, 37% of respondents admitted that financial concerns adversely affected their productivity in the past year. While the percentage of employees struggling financially to the extent that it impacts their employer varies from company to company, the average is assumed to be between 15-25%. An unhappy worker can be a morale buster!

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The Cost of Employees Unable to Retire

Many companies are also affected by additional costs that may be typical – or perhaps unique – to your specific industry. The administrative cost of things such as wage garnishments, hardship loans and absenteeism are just a few possible examples.

What about the cost of employees who find it impossible to retire? There is a cost that can be associated with this group of workers. Older employees are at the higher end of the pay scale; have the most expensive health insurance premiums and other benefit costs; have the most vacation days; and, are at most risk for an accident. Should a company choose to offer early retirement, employees who are financially secure will be more likely to accept the proposal. Furthermore, they are more likely to be less dependent upon their employer once they do retire!

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Total Possible Impact of Employee Financial Wellness

When a company reviews the total possible impact of employee financial wellness they are astounded at the positive potential impact financial education can have on the bottom-line. And while financial education will not likely expunge 100% of these costs, it will make a positive impact. What if providing comprehensive financial education to employees only saved you 10%?

What is the return-on-investment if we provide workplace financial education? How will we benefit? What will it cost? What is the effect of employee financial well-being on the company’s bottom-line?

The ROI Questionnaire will provide us the necessary information to answer the ROI question specifically for your company. Please complete the highlighted areas with your company specific information and return to us. Thank you.