Tackling the Taboo: 9 Steps to Improving Employee Financial Health

As an employer, you may be wondering why you should even consider wading into a discussion about your employee’s finances. The truth is that many of your staff are struggling financially. According to the 2020 Sanofi Benefits Survey, personal finances—at 39%—is the number one cause of stress. And even those who pay their bills on time and set money aside each month have questions.  Companies that provide answers through the provision of resources, education, and financial support, develop greater employee loyalty and are rewarded with increased productivity and lower costs.

Physical and emotional wellness cannot exist without financial wellness. Money worries affect the majority of your workers and cost your firm in the form of presenteeism, stress related illness, accidents on the job, increased healthcare costs, and theft. It’s not enough to wait for employees to come to you. By the time they do, the situation is often very serious. Your staff are not likely to initiate the discussion because talking about money concerns is embarrassing and employees fear repercussions or job loss.

As well, a head-in-the-sand approach ignores an employer’s duty to inquire. Under employment law, supervisors who notice negative changes in employee behaviour, must determine if workplace accommodations are needed to help that employee succeed. Given that financial stress is one of the major contributors to poor emotional health, it is highly likely that a struggling employee is experiencing financial worries but is too ashamed or too private to say anything. 

There are programs available to help managers to learn to spot the signs and symptoms of mental distress and through training, front-line supervisors can help their team members get the assistance that they need. 

But what can your organisation do to help improve overall employee financial wellness and potentially prevent the stress from occurring in the first place? Addressing employee financial wellness involves a multi-layered approach since your team is diverse in its needs and stages of life. By offering a variety of options, your firm improves the chances that one or more of your actions will resonate with each individual.

Here are 9 ways that you can take to set your team up for success.

9 Steps to Improving Employee Financial Health

1. Having a robust Employee Assistance Program (EAP) that provides counselling for personal financial matters including debt management, budgeting, and the creation of a financial plan. Let staff know that the EAP provides money management assistance and help with everything from debt consolidation to the writing of wills.

2. Employees who find themselves in debt may feel so overwhelmed that they stop making regular payments. This can result in calls and harassment from debt collection agencies. As an employer, providing information on the rights and responsibilities around debt collection for each province, including the information that workplace calls from debt collection agencies may be prohibited or limited, can go a long way to reducing stress and shame. Contact the Consumer Protection Office in your province(s) and ask about the Debt Collection Act. Post this information on your company intranet or in the lunch room or other communal space to help get the word out without identifying affected individuals. 

3. Ensure that your workplace is free from hidden financial pressures such as fundraising campaigns, eating out at lunch time, or dress code expectations.  

4. Provide education in a variety of formats. The reality is that many Canadians have never been taught about money management. Avoiding debt, saving, and investing are all too often a big mystery to many of your workers. To compound matters, many feel that they should know how to do this even though they were never taught at home or in school.  

While there is a plethora of information on the internet, people still prefer to learn from people. Running lunch ‘n learn sessions where questions can be asked and real people provide real answers often will spur employees to learn more. Check with your benefits advisor. They will likely either have the resources to run sessions or can refer you to someone who can. Common topics include:

1. Managing debt
2. Learning to budget
3. Establishing goals
4. Saving for retirement
5. Learning to invest

1. “Remember to pay your bills on time.”   
2. “Credit cards are expensive. Interest rates are commonly 18% or higher. Pay your balance each month.”
3. “Try to pay more than the minimum owing.”
4. “Avoid using credit to pay credit.”  
5. “Shop around for the best mortgage terms for you.  Look beyond the interest rate.”

6. Help your employees to save by offering automatic payroll deductions into a short-term savings account, Tax-Free Savings Account (TFSA), a RRSP or all three. The cost of setting up programs is generally minimal.

7. Beyond setting up payroll deduction programs, consider contributing to retirement or other savings programs as part of your firm’s benefits offering.  Employees are far more likely to save their own money—75% versus 5%—when an employer offers a matching contribution.  

Savings programs are one of the most requested benefits by employees. A 2% contribution to a retirement plan is often seen as more impactful than a 2% raise. Likely due to the fact that the secret to financial success is not how much money we earn but how much money we save.  Having a financial cushion greatly reduces stress.

8. Another practical addition to your firm’s employee benefits program could be a student loan repayment program. Recent university grads are often short-term hires. Helping employees new to the workforce will often generate greater loyalty and reduce turnover thus reducing costs.

9. And finally, make it fun! Gamification is one of the best ways to engage staff and help them to learn.  There are numerous apps and programs available to help people learn more about budgeting, saving, and investing. Two examples, aimed at teens but fun for all ages, are Financial Football and the digital version of The Game of Life.  Available in the App Store or on Google Play.

Final Thoughts

Talking about money is one of the last taboos in polite conversation, which is why many employers hesitate to enter into the financial wellness arena.  However, there is a distinct difference between sharing income information or showing off an expensive purchase versus providing your team with tools to help them to be financially well.  

Financial health is a significant component of mental health. Assisting your team to understand the building blocks of financial planning, to help them reduce debt and save more, will go a long way to reducing financial stress and anxiety. Rewarding your firm with reduced absenteeism, increased loyalty, and greater productivity.