Save the Stress: Financial Wellness Programs at Work
Richard King
Being financially sick
or unwell may be almost as important as physical or mental illness. Because if you are stressed out about money, that could make you sick. It could certainly have a major impact on both your family and working life. That’s why many companies and organizations are offering financial wellness programs at work. This could range from helping their staff plan and organize their debt and finances to developing their financial literacy and improving their financial well-being.
What is financial literacy? According to the Financial Consumer Agency of Canada, financial literacy is having the knowledge, skills and confidence to make informed financial decisions. And what is financial well-being or financial wellness? Many experts define it as being able to meet your current and ongoing financial needs. Others call it feeling secure about your financial future or being free to make choices that allow you to enjoy your life.
Financial wellness can also refer to an employee's overall financial health and knowledge and can an employee weather both a short and long-term financial storm. It is a complex subject, and it is not getting any easier. Rising inflation and increasing food costs coming out of an uncertain couple of pandemic years have made almost everyone’s financial situation a little more precarious. Businesses need strategies to assist their employees in these turbulent times and workplace financial wellness programs are one to consider.
Financial wellness is like a safety net. You could try and walk the financial tightrope on your own, but what if you stumble? What happens if you fall? Your employees likely have enough pressure in their lives without having to worry all the time about money. Regardless of income or position in the organization, all staff could feel more financially confident and prepared for the future with more financial support and advice.
How can Workplace Financial Wellness Programs assist employees?
That’s easy. With everything. From day-to-day living to education to buying a home to retirement. Employees can learn to plan, save and a very important lesson: to pay themselves first. There are no financial emergencies when you have a financial plan, only situations and challenges to deal with. Here are some of the elements of a financial plan that employees might find out about with a workplace financial wellness program:
Budgeting
There are two ways to safely manage your finances. Control your expenses or increase your income. Since getting a raise is tough, employees will need a budget to manage their household expenses. Know and track what you spend, and you will feel better.
Saving
Not just for a rainy day, but for the expected like a new car that you know you will need a few years down the road to the washing machine that dies unexpectedly. You can also save for things you would like to have, like a vacation. $150 a month could pay for a trip down south next year.
Managing Credit and Debt
Credit is too easy to get, and debt is too hard to pay down. Financial wellness training can help employees know their limits and learn to live within them. There are options on credit cards and understanding the basics of how credit works will help any employee deal with debt and credit card issues.
Investing
Paying yourself first is a concept that is built on an employee setting aside a portion of their income to invest in themselves. It can be small at first and grow into something bigger later. Employees can learn how the market works and what investments would be best for them and their family.
Benefits of a Financial Wellness Program at Work
Employees can get peace of mind and less stress from a financial wellness program, but what’s in it for employers? Lots. Employees who are not well financially can cause chaos at any workplace. They are certainly more inclined to be less engaged and productive at work. A recent study of Canadian workers found that these employees spent nearly a third of their time at work worrying about finances. Half said they were distracted sometimes by money concerns. One estimate said that an employee with financial troubles could cost an employer an average of $10,000 a year in lost productivity.
There is no doubt that financially-well employees are more productive and more engaged. Research on this issue shows that they are more likely to enjoy going to work, that they feel motivated at work, and that they also feel valued and supported by their employer. One statistic stands out: 92% of professional employee counsellors say that financial wellness positively impacts overall health and workplace productivity.
On the other hand, those in financial distress will definitely lead to overall stress and workplace distraction. These employees may simply not be ‘all there’ at work and lead to presenteeism, a growing concern among employers across all sectors in Canada. One estimate of the cost of presenteeism on productivity is that it is three times that of absenteeism. But helping employees deal with their concerns in this area can pay off for employers. Reducing stress of all sorts can lead directly to improved mental and physical health outcomes. Having a financial workplace wellness plan is also seen as a positive approach and employers who offer this type of benefit have more success in both recruiting and retaining employees in this tight job market.
How to Start a Financial Wellness Program at Work
There are a number of steps you should consider once you have made the decision to introduce a financial wellness program in your workplace. They should include taking a look at your employee group and assessing their needs. Looking at challenges and obstacles to bringing in a program like this and doing your research.
You should have a good understanding of the demographics of your staff group. Are they older, younger or a mix? Would they be more interested in how to pay off their student debt more quickly or retire earlier and more comfortably? Their financial concerns may and will change over time as they age or increase their income. That will need to be factored into your workplace financial wellness program. You can use surveys, focus groups and feedback loops to get input and suggestions as you put your plan together.
What kind of budget can you afford to allocate to a workplace financial wellness program? If your budget is small, you can start small. Maybe bring in some financial experts for lunch and learn sessions. Or create a list of online financial literacy resources and share that with employees. A bigger budget could mean a more elaborate plan that offers individualized financial or retirement planning for your staff.
Communicating the benefits of a workplace financial wellness program will be crucial to both participation and its ultimate success in achieving your goals of better financial health across your company or organization. Take the time to do this right at the beginning, before the plan is implemented and you will have a much better chance of success.
There are also numerous external resources and sources of information that you can access to build your plan. Here are a number of recent surveys and research reports that have examined the financial well-being, challenges and needs of Canadians. They might prove very useful to you as you move forward towards your workplace financial wellness program.
FCAC’s Canadian financial capability survey (PDF, 1.54 MB)
Canadian Payroll Association National employee survey
International Foundation of Employee Benefit Plans – news and research
Financial Planners Standards Council – Omni report: Financial Stress (PDF, 541 KB)
The Autorité des marchés financiers Financial Awareness Index (Québec only)
Chartered Professional Accountants Canada – 2018 Canadian Finance Study
|
Interested in more articles on current issues? Click here for subscription
info on Workplace Today® Online Journal, Canada's leading journal of
Workplace Issues, Plans and Strategies..
|
|
|
|
|
