According to the Financial Consumer Agency of Canada (FCAC), money is the greatest source of stress for Canadians – even more than work, personal and relationship issues. Almost half (40 per cent) of working Canadians feel overwhelmed by their current debt load, which continues to increase yearly for many.
Unfortunately due to the COVID-19 pandemic, many Canadians will continue to see their finances negatively impacted – perhaps for years to come. The pandemic has proven that financial literacy (the ability to understand and implement personal financial management, budgeting and investing) is more important than ever.
When finances create stress in one’s personal life, it’s next to impossible to stop worrying about it while at work. This can lead to negative effects on workplace performance, which could be costing your business thousands of dollars annually. According to a survey by the Canadian Payroll Association, nearly half (46 per cent) of all respondents said financial stress impacts their workplace performance.
Employees Want Financial Literacy Training
Another study by the Canadian Payroll Association indicated that 84 per cent of employees would be interested in obtaining financial education programming in the workplace. Workplace education is nothing new – companies have been offering professional development for years. The difference now is that employees are looking to companies to help them with more than just career growth.
“We spend a lot of time at work, similar to the way kids spend so much time at school, so it makes sense for businesses to offer educational opportunities for employees,” says John Eisner, President of Credit Counselling Services of Atlantic Canada. “Not only does financial literacy training improve the lives of employees, it ultimately improves the bottom line as well, making it a win-win for everyone.”
Eisner says a lot of companies are beginning to realize the positive return on investment of financial literacy training. The not-for-profit credit counselling agency has been hired by numerous firms to deliver financial literacy workshops – both in person and online.
“Our training consists of a one-hour presentation that teaches people the fundamentals of budgeting, saving and money management. It might be surprising to think that adults in the workforce need help with budgeting, but the fact is a lot of Canadians lack the financial literacy skills needed to thrive.”
Negative Impacts of Financial Stress on the Workplace
Presenteeism – the often-unnoticed act of being present at work, but performing sub-optimally – can occur when an employee bears the weight of financial stress. A survey done by Willis Towers Watson found that, of those employees who indicated they had money problems, only 29 per cent them were fully engaged at work (compared to 42 per cent without money concerns).
Besides causing workplace disengagement, financial stress can also negatively affect an employee’s physical and mental health. The FCAC notes that employees experiencing high financial stress are twice as likely to report poor overall health, and four times more likely to experience headaches, depression, and other ailments. This can result in increased healthcare benefits costs, including short-term disability and worker’s compensation claims.
Almost half (48 per cent) of Canadians admit that they have lost sleep due to financial stress. Production errors, administrative and financial mistakes, more workplace accidents and poor customer service can all be outcomes of fatigue in the workplace.
Additionally, the Center for Financial Services Innovation (CFSI) states that employees with financial worries are twice as likely to use sick time when not ill.
Both Employees and Employers Benefit from Financial Literacy
Several reports have suggested that providing staff with financial wellness tools, education and resources will lead to less financial stress and better outcomes for the employee and for the organization.
By creating a more empowered and engaged workforce, employees experience improved mental and physical health and lower absenteeism rates. Employees can retire when expected, providing your business with the opportunity to onboard new talent. Lower long-term healthcare costs and a more productive workplace lead to decreased business-related costs and increased profits.
Furthermore, supporting your employees’ financial well-being can increase your organization’s employee value proposition, and positively impact its competitive advantage.
Investing in Employee Financial Health is Good for Business
The results are clear: as an employer, it’s in your best interest to help reduce your employees’ financial stress. When employees become better equipped to make sound financial decisions, the positive effects on the workplace are too good to ignore.
Credit Counselling Services of Atlantic Canada can help deliver financial literacy and education programs to your employees. Visit www.SolveYourDebts.com to learn how.