1. SHRM Survey Findings: Financial Wellness in the Workplace Sponsored by McGraw-Hill Federal Credit Union May 14, 2014

2. Definitions Financial education: Any workplace initiative, program or resource designed to provide employees with information on how to manage their resources effectively for a lifetime of financial well-being. Employee Generations » Traditionalists: born before 1946; 69 years of age or older. » Baby Boomers: born between 1946 and 1964; 50 to 68 years of age. » Generation X: born between 1965 and 1980; 34 to 49 years of age. » Millennials: born after 1980; 33 years of age or younger. 2Financial Wellness in the Workplace ©SHRM 2014

3. Key Findings What are the most common financial challenges faced by employees? According to 42% of HR professionals, medical expenses are the most common personal financial challenge affecting employees. As of December 2013/January 2014, this number increased seven percentage points compared with 2011. Furthermore, 41% of HR professionals reported that an overall lack of monetary funds to cover personal expenses affected employees at their organization. Do personal financial challenges affect overall employee performance? Seven out of 10 HR professionals indicated that personal financial challenges have a “large” or “some” impact on overall employee performance. Of these HR professionals, approximately one-half reported that employees’ stress (50%) and their ability to focus on work (47%) were the aspects of employee performance that were most negatively affected by personal financial challenges. Are employees currently faced with more personal financial challenges than before? Thirty-eight percent of HR professionals reported that their employees have more personal financial challenges now compared with the early part of the Recession in late 2007, while 23% of HR professionals said their employees are experiencing more personal financial challenges compared with 12 months ago. Are employees more likely to request a defined contribution savings plan loan or hardship withdrawal now than before? Almost two-thirds of HR professionals (62%) agreed or strongly agreed that employees have been more likely to request a defined contribution plan loan over the past 12 months compared with previous years, whereas 44% agreed or strongly agreed that employees have been more likely to request a defined contribution savings plan hardship withdrawal. 3Financial Wellness in the Workplace ©SHRM 2014

4. Key Findings (continued) Are organizations providing financial education to their employees? Nearly three-fifths of organizations (57%) provide some kind of financial education to their employees. Nonprofit organizations are more likely than privately owned for-profit organizations to offer this benefit to their employees. What challenges do organizations that provide financial education face? One-quarter of organizations reported facing obstacles in providing financial education for their employees. The greatest challenges among organizations that offer financial education to their employees are the cost (33%) and the lack of interest among staff (28%). What type of financial education do organizations provide to their employees? The most common types of financial educations organizations offer to their employees are retirement planning (79%), financial counseling/resources through an employee assistance program (75%) and financial investment planning (56%). Which generations are most likely to take advantage of financial education benefits? HR professionals indicated that Baby Boomers (70%) and Generation X employees (53%) are the generations most likely to participate in financial education programs. Furthermore, Baby Boomers are most interested in retirement planning (77%), and Generation X in financial investment planning (44%). What are the biggest obstacles that prevent organizations from offering financial education to their employees? The most common concerns for organization that do not currently offer financial education to their employees are the cost (24%) and the lack of staff resources to pursue offering financial education (22%). 4Financial Wellness in the Workplace ©SHRM 2014

5. Even in an improving economy, many workers continue to struggle with their finances. This research shows that nearly two out of five workers are having a harder time with money now compared with the onset of the Great Recession in 2007. Knowing this, organizations should consider offering some type of financial counseling program for their employees. Other SHRM research has shown that most employers do not leverage their benefits programs as a retention/recruitment tool; less than one-fifth (18%) use their benefits program as a retention tool and about one- quarter (26%) as a recruitment tool).* However, organizations that do leverage these benefits frequently cite their retirement savings and planning benefits as a means of keeping or attracting workers (57% of HR professionals who leverage benefits programs use retirement savings and planning benefits for retention, and 70% of HR professionals use them for recruitment). When developing a formal financial and/or retirement counseling program, HR professionals should tailor that benefit for different generations in the workplace. Baby Boomers and members of Generation X are most likely to participate in a financial education program at work. But younger workers, such as Millennials, represent a fast-growing segment of the labor force, and other research has shown that they value an assortment of retirement options and other types of financial planning they receive through their jobs. What do these findings mean for HR professionals? 5Financial Wellness in the Workplace ©SHRM 2014 *Source: Society for Human Resource Management (2013, December). 2013 State of Employee Benefits in the Workplace Series. Retrieved from http://www.shrm.org/Research/SurveyFindings/Articles/ Pages/2013StateofBenefits-BenefitstoRecruit.aspx.

6. The Impact of Financial Challenges on the Workplace 6Financial Wellness in the Workplace ©SHRM 2014

7. In the past 12 months, which of the following personal financial challenges have affected employees at your organization the most? Note: Respondents who answered “Not sure” were excluded from this analysis. Percentages may not equal 100% due to multiple response options. An asterisk (*) indicates that the response option was not offered in 2011. 7Financial Wellness in the Workplace ©SHRM 2014

8. How much of an impact do employees’ personal financial challenges have on employees’ work performance? Note: Respondents who answered “Not sure” were excluded from this analysis. Percentages may not equal 100% due to rounding. 8Financial Wellness in the Workplace ©SHRM 2014

9. What aspects of overall employee work performance are MOST negatively affected when employees face personal financial challenges? Note: Only respondents who said that personal financial challenges have “a large impact” or “some impact” on overall employee work performance were asked this question. Respondents who answered “Not sure” were excluded from this analysis. Percentages do not equal 100% due to multiple response options. An asterisk (*) indicates that the response option was not offered in 2011. 9Financial Wellness in the Workplace ©SHRM 2014

10. Were employees at your organization faced with more, about the same or fewer personal financial challenges in December 2013/January 2014 compared with…? Note: Respondents who answered “Not sure” were excluded from this analysis. * The early part of the Recession refers to late 2007. 10Financial Wellness in the Workplace ©SHRM 2014

11. In the past 12 months, has the amount employees contributed to their organization-sponsored defined contribution plans (e.g., 401(k), IRA, etc.) changed compared with previous years? Note: n = 335. Respondents who answered “Not sure” or “My organization does not offer this benefit” were excluded from this analysis. 11Financial Wellness in the Workplace ©SHRM 2014

12. In the past 12 months, compared with previous years, employees have been more likely to request a… Note: Respondents who answered “Not sure” or “My organization does not offer this benefit” were excluded from this analysis. 12Financial Wellness in the Workplace ©SHRM 2014

13. Employer-Sponsored Financial Education Resources 13Financial Wellness in the Workplace ©SHRM 2014

14. Does your organization currently provide any kind of financial education to your employees? Note: Respondents who answered “Not sure” were excluded from this analysis. 14Financial Wellness in the Workplace ©SHRM 2014

15. Does your organization currently provide any kind of financial education to your employees? Note: Only statistically significant differences are shown. Comparisons by organization sector Nonprofit (71%)>Privately owned for-profit (50%) Comparisons by organization sector Nonprofit organizations are more likely than privately owned for-profit organizations to provide any kind of financial education to their employees. 15Financial Wellness in the Workplace ©SHRM 2014

16. What type of financial education do organizations provide to employees? Note: n = 208. Only respondents whose organizations offered financial education were asked this question. Percentages do not equal 100% due to multiple response options. An asterisk (*) indicates that the EAP includes financial counseling/resources. 16Financial Wellness in the Workplace ©SHRM 2014

17. How do organizations provide financial education to employees? 2014 (n = 208) 2011 (n = 219) 2009 (n = 256) Seminars during work hours using outside speakers* 61%60%57% Paper resources (e.g., pamphlets, handouts) 51% -- New-hire employee orientation44% 47% Self-directed e-learning37% - - Intranet*36%40%42% Seminars during work hours lead by trained in-house staff* 25%17%31% In-house newsletter23%25%30% Seminars outside of work hours*20%22%15% Employee assistance program (EAP)**5% - - Mandatory seminars/training -11%17% Other6%9%2% Note: Only respondents whose organizations offered financial education were asked this question. Percentages may not equal 100% due to multiple response options. A dash (-) indicates that the response was not asked that specific year. An asterisk (*) indicates that the response option was modified from previous years. A double asterisk (**) indicates that the response option was developed from open-ended responses. 17Financial Wellness in the Workplace ©SHRM 2014

18. In the past 12 months, has your organization seen an increased demand for financial education from employees? Note: Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. 18Financial Wellness in the Workplace ©SHRM 2014

19. In 2013, have the financial education offerings at your organization changed compared with 2012? Note: n = 195. Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. Percentages do not equal 100% due to rounding. 19Financial Wellness in the Workplace ©SHRM 2014

20. For your 2014 budget, will you request more, about the same or fewer funds for financial education than in previous years? Note: n = 164. Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” or “No funds for financial education in 2014” were excluded from this analysis. 20Financial Wellness in the Workplace ©SHRM 2014

21. Which generations are most likely to participate in the financial education offerings at your organization? Note: n = 208. Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. Percentages do not equal 100% due to multiple response options. 21Financial Wellness in the Workplace ©SHRM 2014

22. What financial education topic is most important to each generation? Note: Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. Percentages may not equal 100% due to rounding. Respondents were asked to select one financial education topic for the generation that was most likely to participate. Data are sorted by the “Baby Boomers” column. Results on “Traditionalists” are not included due to a small sample size (n=20). Baby Boomers (n = 144) Generation X (n = 105) Millennials (n = 29) Retirement planning77%20%14% Medical/health care costs planning 9%7%10% Financial investment planning 9%44%31% General budgeting advice1%12%24% Credit restoration/repair resources 1%9%7% Home buying seminars1%4%3% Privacy, security and fraud protection 1% 3% Education planning0%4%0% Other0% 7% 22Financial Wellness in the Workplace ©SHRM 2014

23. Has your organization conducted a needs assessment (including surveys, focus groups, etc.) to determine what topics or delivery methods of financial education would be most beneficial to your employees? Note: Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. 23Financial Wellness in the Workplace ©SHRM 2014

24. Overall, how effective has your organization’s financial education initiative been in improving your employees’ financial wellness? Note: n = 143. Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. 24Financial Wellness in the Workplace ©SHRM 2014

25. Has your organization’s financial education initiatives faced any obstacles? Note: Only respondents whose organizations offered financial education were asked this question. Respondents who answered “Not sure” were excluded from this analysis. 25Financial Wellness in the Workplace ©SHRM 2014

26. What is the biggest obstacle that your financial education initiatives face? Organizations currently offering financial education Organizations not currently offering financial education 2014 (n = 43) 2011 (n = 48) 2009 (n = 171) 2014 (n = 86) 2011 (n = 150) 2009 (n = 132) Cost of providing financial education 33% 25%24%25%27% Lack of interest among employees28%27%37%16%23%19% Lack of staff resources to pursue this offering* 16%10%-22%0%- Concern about perceived violation of fiduciary duty if providers of financial education (i.e., outside providers) are not objective* 7%6%11%8%9%14% Lack of support from organization’s leaders 5%8%11%15% 14% Not sure how to create or find financial education resources 2%4%8%2%14%7% Lack of need in the workplace0%6% 7%8%17% Other9%4%2%5%6%2% Note: An asterisk (*) indicates that the survey choice was changed from prior survey years. Percentages may not equal 100% due to rounding. A dash (-) indicates that data are not available. Data are sorted by “Organizations currently offering financial education” in 2014. 26Financial Wellness in the Workplace ©SHRM 2014

27. 27 Demographics

28. Demographics: Employee Generations in Respondents’ Workplace Note: n = 361. Percentages may not equal 100% due to multiple response options. Respondents were asked to select up to two generations that primarily represented their workforce. Respondents who answered “Not sure” were excluded from this analysis. 28Financial Wellness in the Workplace ©SHRM 2014

29. Demographics: Employee Gender in Respondents’ Workplace Note: n = 346. Respondents who answered “Not sure” were excluded from this analysis. 29Financial Wellness in the Workplace ©SHRM 2014

30. Demographics: Organization Industry 30 Percentage Professional, scientific and technical services22% Health care and social assistance18% Finance and insurance14% Manufacturing11% Educational services10% Government agencies10% Transportation and warehousing6% Retail trade5% Administrative and support and waste management and remediation services 5% Accommodation and food services4% Religious, grant-making, civic, professional and similar organizations 4% Note: n = 354. Percentages may not equal 100% due to multiple response options. Financial Wellness in the Workplace ©SHRM 2014

31. Demographics: Organization Industry (continued) 31 Percentag e Utilities3% Information, publishing industries3% Wholesale trade3% Construction2% Arts, entertainment and recreation2% Real estate and rental and leasing1% Repair and maintenance1% Mining1% Agriculture, forestry, fishing and hunting1% Personal and laundry services0% Other5% Note: n = 354. Percentages may not equal 100% due to multiple response options. Financial Wellness in the Workplace ©SHRM 2014

32. Demographics: Organization Sector Note: n = 353. Percentages do not equal 100% due to rounding. 32Financial Wellness in the Workplace ©SHRM 2014

33. Demographics: Organization Staff Size Note: n = 345. Percentages do not equal 100% due to rounding. 33Financial Wellness in the Workplace ©SHRM 2014

34. Demographics: Other Does your organization have U.S.-based operations (business units) only, or does it operate multinationally? U.S.-based operations only 83% Multinational operations 17% n = 359 Is your organization a single-unit company or a multi-unit company? Single-unit company: A company in which the location and the company are one and the same 36% Multi-unit company: A company that has more than one location 64% n = 358 Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both? Multi-unit headquarters determines HR policies and practices 65% Each work location determines HR policies and practices 1% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 35% Note: n = 234. Percentages do not equal 100% due to rounding. What is the HR department/function for which you responded throughout this survey? Corporate (companywide)81% Business unit/division13% Facility/location6% n = 232 34Financial Wellness in the Workplace ©SHRM 2014

35. SHRM Survey Findings: Financial Wellness in the Workplace Response rate = 14% Sample composed of 401 randomly selected HR professionals with the title of assistant director or above from SHRM’s membership Margin of error = +/- 5% Survey fielded December 17, 2013 – January 27, 2014 Sponsored by McGraw-Hill Federal Credit Union Survey Methodology 35Financial Wellness in the Workplace ©SHRM 2014

36. Retirement Plans Resource Page Retirement and Financial Planning Articles Defined Contribution Plans Resource Page Defined Contribution: Loans and Withdrawals Defined Contribution: Education and Advice Additional SHRM Resources 36Financial Wellness in the Workplace ©SHRM 2014

37. For more survey/poll findings, visit shrm.org/surveys.shrm.org/surveys For more information about SHRM’s Customized Research Services, visit shrm.org/customizedresearch.shrm.org/customizedresearch Follow us on Twitter @SHRM_Research.@SHRM_Research About SHRM Research Project leader: Christina Lee, researcher, SHRM Research Project contributors: Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research Evren Esen, director, Survey Research Center, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center 37Financial Wellness in the Workplace ©SHRM 2014

38. Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.shrm.org About SHRM 38Financial Wellness in the Workplace ©SHRM 2014