Firms Offering Finance Classes to Employees to Allay Anxiety

When Michael and Amy Sykes decided to enroll in a personal finance class offered by Amy’s employer, McLeod Health, the Florence, South Carolina, couple owed about $120,000 in credit card bills, car payments and other debt (not including their mortgage). Less than two years later, they have whittled the debt down to $25,000 and put a budget in place that includes paying cash for everything. Their arguments over money have stopped, and Michael, a self-employed landscaper, has been able to scale back his work hours.

A hospital system might seem like an odd place to take a personal finance course, but employers like McLeod Health realize that their workers’ financial worries are spilling into the workplace, hurting productivity and increasing absenteeism.

“I don’t think there’s still the recognition of the pervasiveness of financial issues in the workplace and their impact on business,” says Tim Hess, associate vice president of human resources at McLeod Health. He championed using personal finance expert Dave Ramsey’s Financial Peace University program, which is run by McLeod volunteers.

Since the program started in September 2008, about one-tenth of McLeod’s roughly 4,700 employees have taken part, paying off about $2 million in debt along the way.

A survey released in July by Buck Consultants found that 30 percent of employers are offering financial management classes to help combat workplace stress. Plenty of employees need the advice. MetLife Inc.’s Study of Employee Benefits Trends, conducted at the end of 2009, found that about half of the 1,300 full-time employees surveyed are concerned about their finances, and 17 percent acknowledge spending time at work dealing with financial issues.

MetLife offers its own free workplace course, called Retirewise. The program was introduced in 2008, and the number of participants has doubled to more than 500 employers this year. The company is gearing up to expand it even further, changing the name to Plansmart to cover a broader range of financial issues.

When employees are under financial duress, “they focus on the solution 24 hours a day. It certainly doesn’t turn off when they clock in,” says Todd Mark, vice president of education for the not-for-profit Consumer Credit Counseling Services of Greater Dallas, who teaches personal finance courses in the workplace.

Employees might spend as much as 20 percent to 30 percent of their working hours thinking about or dealing with money woes, Mark says. They “often are embarrassed and ashamed to talk to HR about it. They don’t want to seem like they’re in chaos.”

Lorraine McCord, director of the International Trade Center SBDC, a joint program of the Small Business Administration and the Dallas County Community College District, retained Mark to speak to her employees and those in the community college system about good money management habits.

About 50 to 60 people attended, and the only costs for McCord were a boxed lunch and a certificate for each participant. Many of the employees wanted even more information on managing debt and improving credit scores, so McCord hopes to organize a new session next semester.

Robert Harris, director of the financial wellness program at Waddell & Reed Inc., a financial planning company based in Overland Park, Kansas, says his firm began offering classes in 2005 and has seen the greatest demand for general investment and retirement planning, as well as basic budgeting and cash flow courses.

Waddell & Reed encourages spouses and partners to attend, too, because when employees try to explain financial planning at home, “certain things get lost in translation,” Harris says.

Waddell & Reed charges $200 to $1,000 per employee for the courses. Some companies foot the bill, but others split it with employees. Harris says he believes that employees with a financial stake in a class are “more likely to succeed.”

At McLeod Health, employees who enroll in the Financial Peace course sign an agreement to pay for course materials—$139—if they don’t complete the class. Otherwise, McLeod picks up the tab.

Everyone from entry-level employees to physicians has attended the courses. “Research clearly shows financial stress and distress don’t play favorites,” Hess says.

Amy Sykes, a nurse at McLeod, says the course “is better in a way than getting a raise. They’re helping us to better manage with what we have.”

Workforce Management, December 2010, p. 12 — Subscribe Now!