Transcript Tom Garman’s Thoughts on Employee Education

Determining ROI for
Workplace Financial Education:
Use of an Online Calculator
Personal Finance Employee Education
Foundation™
October 20, 2010
©Personal
Finance Employee Education Foundation, 2010
The PFEEF ROI Calculator
The online calculator…
• Estimates the employer's return-oninvestment (ROI) for providing
workplace financial education
• Makes reasonable & conservative
assumptions about 12 work outcome
factors
• Uses a framework based on industry data
& empirical research
To Use the PFEEF ROI Calculator
The employer inputs
• Number of full-time employees
• Average salary with benefits
The calculator
• Calculates estimates based on 12 workoutcome factors & program costs
• Displays computations for 4 workoutcome factors
Assumptions for Work Outcome Factors
1. Turnover and Training Costs*
• Savings based on retention of those impacted by
program who otherwise would leave company
• Based on national figures & conservative turnover
rate
2. Health Care Costs*
• Employer’s improved health care costs due to
employees’ improvement in financial behaviors
• Based on Towers Perrin’s Health Care Cost Survey
*Displayed; Cost figure may be modified
Assumptions for Work Outcome Factors
3. Work Time Wasted*
• Savings based on increased production of those
whose improved financial behaviors mean less
time spent dealing with financial concerns
• Based on national figures & empirical data
4. Personal Financial Wellness (PFW)*
• PFW scores based on valid & reliable
established measure of financial wellness
• Based on national norms
*Displayed; Cost figure may be modified
Assumptions for Work Outcome Factors
5. Absenteeism
• Figure represents reduction in unscheduled
absences from work by those impacted by
financial education program
• Based on national cost figures & empirical data
6. Job Performance Rating
• Figure represents increased level of
performance by those impacted by the program
• Based on national figures & empirical research
Assumptions for Work Outcome Factors
7. Health Care Premium Savings
• Figure based on average savings per enrollment
in health care plan less costly to employer
• Based on national cost figures & industry
averages
8. Health Care Spending Plan
• Figure represents employer savings on FICA
taxes due to increase in enrollment in health
care flexible benefits spending plan
• Based on tax savings of 7.65% & industry ave.
Assumptions for Work Outcome Factors
9. Dependent Care Spending Plan
• Figure represents employer savings on FICA
taxes due to increase in enrollment in
dependent care flexible benefits spending plan
• Based on tax savings of 7.65% & industry ave.
10. Workers’ Compensation
• Savings on employer costs associated with
workers’ comp claims due to impact of
financial education program
• Based on national cost figures & industry ave.
Assumptions for Work Outcome Factors
11. Garnishments
• Savings on employer costs associated with
processing of garnishments due to impact of
financial education program
• Based on national cost figures & industry ave.
12. Percentage of Employees Impacted
• % of employees whose financial behaviors are
impacted by program. (Default = 30%)
• Based on industry averages and empirical data
Program Costs:
Default = $150/employee participant
Resources
http://personalfinancefoundation.educatedinvestor.com/fss/ROICalcula
tor/calculator.html
(WEB ADDRESS FOR CALCULATOR)
Judith N. Cohart, President, Personal Finance Employee Education
Foundation, Tele: 859-433-0557; Email: [email protected] Web:
www.personalfinancefoundation.org
Information for this slide show was taken from the following articles all
of which can be found on the PFEEF website at
www.personalfinancefoundation.org:
 Bagwell & Kim, 2008; Drentea, 2000; Drentea & Lavrakas, 2000;
Garman et al., 1999, 2004, 2007; Genco et al., 1999; Jacobson et al.,
1996; Kim, Sorhaindo, & Garman, 2003 & 2004; Lyons & Yilmazer,
2005; O'Neil et al., 2005 & 2006; Prawitz et al., 2006 & 2007;
Sorhaindo & Garman, 2002.