How much do you know about your employees’ financial wellness? Are they readily making ends meet? Or are they secretly distraught with financial woes?
Money is a sensitive topic, and people often feel awkward revealing their concerns. Whether you realize it or not, financial woes are likely affecting your employees and may be contributing to mental health issues.
Open communication about mental health is a big movement nowadays. As you are likely aware, Bell’s Let's Talk Day falls on January 31st this year, with the goal of facilitating dialogue about mental health issues.
How can all employers likewise encourage discussion with employees about mental health—including financial stress in the workplace?
Promoting Financial Wellness in the Workplace: Why Should Employers Care?
Every good employer wants a happy, healthy team. After all, there is an critical relationship between financial stress and productivity. Stressed employees are less productive and engaged, hampering the entire company's success.
The Conference Board of Canada found that anxiety and depression cost the Canadian economy around $50 billion every year. What's causing such mental distress? According to research by Sunlife, a big part of the problem is personal finances. In fact, among Canadians, finances account for 75% of high stress levels.
If you're wondering how this affects you, Sunlife also found that one third of Canadians are distracted at work due to financial worries. That’s one third of your workforce, whose energy could be better spent working towards company goals.
What you can do to help
In supporting employees with financial stress, you can improve their quality of life—as well as your company's viability.
Address a range of concerns
Depending on salary, age bracket, and financial habits, different employees will have different financial concerns. Employees with lower salaries might be struggling to pay off debts or to save for retirement. (Of course, those with higher salaries might have similar issues due to increased spending.)
Consider these common concerns for each age bracket:
- 20s – paying off student loans
- 30s – buying a home
- 40s – saving for kids' education
- 50s – saving for retirement
- 60s – paying for increased healthcare costs without depleting retirement savings
Remember that people face unique challenges based on their values and spending habits—and also on their understanding of basic money management.
Focus on financial literacy
Lack of knowledge is a big contributor to financial troubles. Many people need to brush up on financial wellness basics. Once they understand the fundamentals, employees will have a strong foundation to start investing and taking charge of their money.
Financial literacy helps people with both short- and long-term planning. If they can manage day-to-day expenses and pay off debts more effectively, they can put money into retirement savings and other investments. As a starting point, distribute clearly written guidelines on financial planning—including tips on courses, online sources, and further reading.
Improving financial literacy will help employees feel more confident and secure with their money, which is a big step toward reducing anxiety.
Reduce debt to promote saving
Canadians are accumulating more and more debt. Average individual debt is now around $21,000, in addition to any existing mortgage payments.
For employees trying to pay off debts, highlight ways to reduce liabilities. For example, they could simply transfer balances from accounts with high interest rates to those with lower rates.
If employees have mortgages, they could opt for accelerated bi-weekly mortgage payments to pay off their balances faster.
Another option is rounding up loan payments. Paying an extra $15 monthly is hardly noticeable, but makes a big difference.
Tip: Earmark any extra money (from tax refunds, bonuses, inheritances, or gifts) for debt payments.
Invest in a workplace financial wellness program
A financial wellness program makes it easy for employees to learn about money matters by offering in-house learning opportunities. Employers can bring in a financial expert (like Montridge) to talk about financial planning or to give brief individual consultations.
A face-to-face, personalized approach is reassuring to employees struggling with money problems. Employees can ask questions and get professional advice for their particular needs.
Also consider facilitating weekly or monthly discussion groups for employees to chat with one another. Not only would this promote camaraderie, but colleagues could compare experiences, share ideas, and encourage one another to stick to budget goals.
Financial challenges are a reality, and they are unlikely to disappear anytime soon. Start sooner, rather than later, to support employees in dealing with them.
If not, you risk undermining your company's bottom line. Sure, providing support requires an initial outlay. But, by reducing employee stress, you'll not only nurture a happier workforce—you'll boost productivity, attract top employees, and guarantee a healthy bottom line.