Report: Financial literacy education presents an opportunity for both public employers and employees
With inflation driving up prices for everything from groceries to houses, the number of public service employees who say they’re worried about their personal finances and financial literacy has risen by more than 10% over the last four years, according to new research from the MissionSquare Research Institute.
“Among those who worry about their finances or financial decisions, more than three in four (77%) worry about their finances or financial decisions while at work,” reads the report, “Public Sector Employee Financial Wellness Program Needs and Preferences,” which was based on a survey of more than 1,000 state and local employees conducted last year by Greenwald Research. “This is a substantive increase for 2019, when two in three (66%) of those worrying about finances/financial decisions reported doing so at work.”
While troublesome given that the local governments have historically struggled to compete with salaries offered in the private sector, the findings also present an opportunity for public administrators. While many public employers offer some sort of financial literacy education program, most do not.
Herein lies the opportunity, according to researchers: only 35% of those have participated in the program. Meanwhile, 67% of those who either don’t have access to an employer-provided financial edicatuion program or who aren’t currently participating said they’d be interested in participating in one in the near future if one was offered.
“With the vast majority of public sector workers worried about their personal finances while on the job, effective employer-based financial literacy programs can benefit both employees and employers” said Rivka Liss-Levinson, Ph. D, a senior research manager at MissionSquare Research Institute and author of the report. “Public service workers are showing a strong interest in financial wellness, and they believe it is important for their employer to provide such programs. The good news is that we’re seeing an uptick in public employers offering financial education programs, along with positive changes to financial behaviors among program participants.”
Offering such opportunities is a growing trend within public agencies. Forty percent of those surveyed for the study said their employers offer some sort of educational program, up from 29% in 2019.
“While it is not clear whether this significant increase is due to substantive increase in the number of employers offering financial literacy programs or an increase in the number of employees who are aware of their employer-based financial literacy progmam, both explainations—or some combination of the two—are positive developments,” the report says.
The most common reasons for employees being unable or not likely to participate in an education program were inconvenient time or not given time off during work to participate (66%), feeling confident with existing resources (62%), and not enough time (60%).
And among all topics, planning for retirement was of the most interest, followed by investing, insurance, and budgeting and planning, among others.
“The majority of all survey respondents believe that it is important for their employer to offer a financial literacy or financial education program,” the report says, noting it “also points to several clear areas of opportunity for improvement in financial literacy or financial education program design and implementation. These include better program components (e.g., incentives for participating, the medium through which it is being offered, who administers the program), better raligning program topic offereings with employee interests, expanding program offerings to non-employees (e.g., spouses and dependents), and tracking the effectivenessand success sof the program.”
For more information, visit MissionSquare Research Institute’s website. A webinar will be held on the findings by the organization for those interested on Tuesday.