Did you know that employee financial stress can cost your business thousands of dollars each year?
Financial stress has serious consequences for employee health—physically and mentally. Absenteeism, reduced productivity, and low engagement are all common outcomes. On a business level, financial stress can also increase employee turnover and health care costs.
Recently graduated employees are especially vulnerable to these effects. With personal debt and cost of living on the rise, ensuring employees are financially literate is more important than ever.
In this blog, we’ll offer 3 simple ways you, as an employer, can help. Armed with these financial wellness tips, your employees will be thriving in no time:
Employees with great financial wellbeing feel secure about their future. They know they can meet their financial needs, which frees them to live a life they love.
Three of the most common sources of financial stress include:
So how can you help employees achieve financial wellness? Here are three ways to start.
Try running a workshop on budgeting at the office. Offer financial wellness tips for making budgeting a habit. Schedule a follow-up workshop one month later to check in on employees’ progress.
Remind employees to include both activities they enjoy and unexpected costs in their budgets. Accidents happen. Phones get lost. Great budgets keep expenses like these in mind.
You can also point employees to useful financial resources. The Government of Canada’s budget calculator is one great example. Apps like Mint and Ahorro can also help. Encourage employees to track their expenses by offering to cover the cost of the app.
Debt is a major financial stressor for many people.
Help employees cope by offering information about interest rates and how they affect debt levels. Guide them in developing strategies for debt management. Remind them to include realistic timelines and prioritize which debts to pay first.
At the same time, emphasize that budgeting and saving are essential for avoiding more debt. Help employees check their credit score so that they can plan for the future. Recommend resources on where to get help, like the You Need a Budget app.
It’s hard to save effectively without a clear vision of the future.
Employees need to understand the importance of setting long- and short-term goals. Are they planning for retirement? Do they want to save for a car or a house? Is paying off debts their main priority?
Determining the answer will help them pick the best savings plan. A few popular options include:
Educate employees on the benefits of starting an RRSP. Make sure they’re aware of how much they can contribute annually. Let them know they won’t be taxed on any gains.
You can also offer to set up a Group Retirement Savings Plan (GRSP) for employees. With this plan, you’ll incentivize savings by matching whatever amount employees put into their accounts.
GRSPs have an added benefit, as any contributions you and the employee make are tax-deductible for the employee.
TFSAs are another great budgeting strategy, especially for employees with shorter-term financial goals. Buying a home or becoming a parent are just two common examples.
Let employees know that while any deposits into a TFSA are not tax-deductible, there is no tax when the funds are withdrawn. Plus, unlike an RRSP, employees do not lose the ability to repay money taken out of the plan.
It’s easy to set up a payroll deduction plan for short-term savings that will allow your employees to accumulate money for an emergency fund, a vacation fund, or any purchase important to them in the next year or two. As an employer, consider giving employees the option to re-direct a small portion of your matching group retirement plan contributions into the short-term plan to help accomplish their goals faster.
Complement these financial wellness tips with the support of an employee benefits advisor. These skilled professionals can help you improve employees’ financial security. This, in turn, can reduce your business costs and risks in the long-term.
Sit down with your advisor and strategize how to maximize employee wellness. Ask them how to introduce employment assistance programs or workplace benefit plans.
Employee benefits advisors can also offer advice on how to better educate employees. Consider hosting financial workshops or offering online learning tools. Lunch and learns, like Montridge’s session on Financial Wellness 101, are another effective option to consider.
With these financial wellness tips in hand, you can empower your employees to take control of their finances and improve their financial literacy. You’ll end up with happier, more secure employees. This, in turn, will help you keep your business running smoothly—a win-win for everyone.