What are the impacts of your employees’ financial problems on their health?
Money is a never-ending source of dispute between partners and is also a well-known cause of stress. In Canada, financial problems eclipse work, personal and health concerns.
It’s not easy to master personal finances. Managing this requires both knowledge and skills, so it’s not surprising that people often use the services of financial security advisors!
These days, some of your employees may be experiencing financial issues. Let’s look at how this can affect them and possible solutions for helping them.
The numbers
On the positive side, 64% of Canadians have an emergency fund to tide them over for three months in the event of misfortune.
In spite of this, many Canadians still experience difficulties with their finances. Making a budget and sticking to it is a challenge. Many people live from pay cheque to pay cheque, which limits their capacity for savings and investments. Retirement seems to be a pipe dream, so planning for it doesn’t get done.
Here are some statistics about financial stress in Canada:
- 45% of Canadians feel overwhelmed by debt.
- 48% suffer from insomnia due to their economic problems.
- 43% delay their retirement since they don’t have enough savings.
- 35% spend their entire pay cheque, if not more.
News about debt levels, inflation and consumers’ decreased buying power contributes to financial stress. Ideally, the problem should be addressed by society as a whole.
Is financial insecurity taboo?
It seems so. According to a study by LifeWorks, 61% of Canadians don’t ask for financial advice even if they're deeply in debt.
People are afraid of being labelled. This fear of being stigmatized is negative when people need to talk about their finances and ask for help. It also contributes to increasing isolation and a culture of secrecy.
Bringing financial worries to work
When you can’t make ends meet, it weighs you down. The worry distracts you from your work.
It can cause your employees to be stressed and interfere with their concentration. They also are at risk of falling ill or having other symptoms that affect their physical and mental health, such as:
- Anxiety
- Depression
- High blood pressure
- Heart disease
- Problems sleeping
- Headaches, etc.
The financial stress your staff is experiencing ends up affecting your organization. Working while distracted like this hurts productivity. In addition to increasing the risk of errors and accidents, it can lead to bad decision making.
The consequences of financial stress on your organization
The decrease in productivity caused by your employees’ financial difficulties is costly. Here’s what it means for an organization of 200 employees over the course of a year:
- 3.5 hours working while distracted per week
- 7,521 hours lost per year
- $1,040 per employee for a total of $208,031
Putting figures aside, you’ve probably noticed that financial stress makes human resources management more complex. You have to deal with:
- Increased absences and sick days
- Higher employee turnover
- Lower employee engagement
- More strained labour relations
Know how to read the signs of financial stress
To support the financial well-being of your staff, you need to pick up on the signs of economic insecurity.
Provide training to your managers and human resources team. They are your eyes and ears on the ground and your first responders.
Tact and kindness are what’s needed to build trust and overcome the fear of being stigmatized.
Transform financial stress into financial well-being
Take the bull by the horns when it comes to reducing the impact of these worries on your organization.
By investing in the financial well-being of your employees, you can play an important role in reducing this form of stress on your employees. Your organization will benefit from this plan, beginning with reduced absenteeism and increased productivity.
Rewards over and above pay
Do you pay your staff their true worth? Do you provide a pension plan? What other benefits, financial or otherwise, do you offer?
It’s time to review overall compensation in your organization. And it’s not just a question of pay! Find out what your employees’ real needs are and consider various options for improving their financial situation, while staying within your means:
- Group benefits
- Vacation and leave time
- Pension plan to which you could contribute
- Share purchase plan through pay deductions
- Parking spaces
- Company discounts on products and services
- Company car, etc.
Promote financial education
Did you know that most employee assistance programs (EAP) offer the services of experienced financial security advisors? They can guide your employees.
And if your organization doesn’t have an EAP, there are other solutions:
- Periodic presentations on financial management
- Financial education activities (quiz, etc.)
- Referrals to professional resources
There’s many number of topics!
Before committing to a program for improving the financial knowledge of your employees, find out what their needs are. What do they want to learn to put their affairs in order?
Finances includes many aspects: budget, savings, loans, financial planning, etc. It you want to help, it’s best to target topics that address the concerns of your employees.
Adapt the themes to significant life events:
- Buying their first home
- Starting a family
- Living as a couple
- Getting ready to retire
- Getting separated or divorced
- Paying for children’s education
- Starting a new job, etc.
Don’t have a lot of time or money to offer a comprehensive financial well-being program (This hyperlink will open in a new tab)? Then choose quality over quantity. You can also take advantage of professional expertise in line with your budget (This hyperlink will open in a new tab).
Need help?
Promoting your staff’s financial well-being means taking care of your own finances as well. Adopt solutions that promote organizational health.
Specialists are available to guide you if you need assistance. They’ll help you devise strategies to encourage your employees to adopt healthy financial habits.
