KANSAS CITY, Mo. (1/24/14)--Credit unions searching for innovative ways to help the community should consider focusing some attention internally, according to a report by Mazuma CU.
Extending financial literacy and financial education programs to credit union employees can help both the institution's bottom line and the community, the credit union said in the third article of its "Community Collaboration" series.
According to the Kansas City, Mo.-based credit union, there is a real need for financial education throughout the national workforce, with some 85% of American workers wanting financial education.
The credit union also pointed to evidence that programs could essentially serve as wise investments in human capital. About 25% to 40% of employees report having difficulties staying productive because of financial problems, it claims. Mazuma also cited a study by the Personal Finance Employee Education Foundation, which found that the average employee wastes about five days worth of time at work due to personal financial issues.
"Financial education can, therefore, be a useful tool to reduce the associated costs of stress such as absenteeism, low productivity, turnover, and workplace distractions," President/CEO Brandon Michaels said, while increasing "the quality of life for employees."
Credit unions, many of which already teach financial literacy and financial education in their communities, are in a unique position to address this problem. But, Michaels warned that one-way information sessions, brochures and websites are insufficient.
"Employees must be able to put into context and apply the information they learn," the credit union said in the piece on corporate social responsibility. "They must be able to apply what they learn to their daily life and to change behavior. While it will not be a magic bullet to solve all employee financial issues, it will reduce the detrimental effects."
The syllabus should incorporate more than benefits and retirement plans, the credit union advocated. It should include lessons on daily living, debt management and budgeting, with topics that include setting goals, net worth, cash flow, income, and predicting future costs.
Michaels encouraged credit unions considering an employee financial education program to engage employees in the planning stages by asking them what sort of information they want, how it should best be delivered, and by whom.
"Unless they are in a crisis, most employees won't take the time to seek out help on their own. This is why employees want to receive this type of education at work and from someone who does not sell the products taught about," he said.