By Debbie Patton, Consultant, Investment & Retirement
Are financial burdens and the associated stress taking a toll on your employees? Recent statistics from the Bank of Canada suggest the average Canadian household debt level has increased over the last 20 years from about 100% of disposable income to about 170%. In simpler terms, the average Canadian owes about $1.70 for every dollar of income he or she earns per year, after taxes.
That’s a considerable amount of debt and while it might be hard to see, your employees could be dealing with financial stress that ends up impacting them both outside and inside of the workplace. According to the Canadian Payroll Association’s National Payroll Week™ (NPW) 2018 Employee Research Survey, 46% of employed Canadians say financial stress is impacting their workplace performance. Of those Canadians, 47% indicate they would be uncomfortable talking about debt with a colleague or peer.
As an employer, you can’t control how your employees spend their money. However, if you knew financial stress was affecting the physical and mental health, as well as productivity, of almost half of your employees, would you feel compelled to do something about it?
November is Financial Literacy Month, an opportunity to shine the light on your employees’ financial habits and help them understand what tools and resources are available to them.
Here are a few ways you can help your employees better their financial health.
Remind them of what’s offered.
Do you have a retirement plan for your employees? Often enough employees don’t use retirement programs to the best of their abilities. For instance, they don’t max out their contribution if a matching program is in place, leaving money on the table. By reminding your employees about the benefits of the plan you can help them save for their retirement.
Point them in the right direction.
Let your employees know about the programs out there that can help them when dealing with financial issues. If your organization has an Employee Assistance Program (EAP) this can be a great resource. EAP programs offer assistance to employees with both personal and work-related problems that can impact their well-being and job performance. This includes financial wellness. Typically, you can find articles, videos, podcasts and other tools that can help employees learn more about money management and how to seek help if needed. Let your employees know about your EAP offering and how it works, and they can begin to utilize it to improve their financial well-being.
Additionally, there are external resources available to your employees. For instance, Canada has a national strategy to support Canadians in having the knowledge, skills and confidence to make responsible financial decisions and through the Government of Canada website, Canada.ca, individuals can access a wealth of information and tools. The website also includes resources that you can share with employees to promote financial literacy.
An employee struggling with financial issues might not know where to turn but these resources can be a valuable help and set them in the right direction.
Use clear communications.
Having these resources available is only helpful if employees know what’s available. That’s where employers can help – by spreading the word. Make sure your communications are simple – use plain language, deliver the message in bite-size chunks and don’t overwhelm your employees with volumes of communications that can be simplified. Just take a minute, think about your audience and what might be the best message and way of conveying that message. By taking the time on your communications, you’ll be able to help an employee understand both what is available for them and how they can access these resources.
As we head into the busy holiday season, a time when spending can quickly exceed budgets, communicating to your employees about financial literacy and wellness may be just what they need.
If you have any additional questions, please reach out to your Accompass consultant.