More and more Canadians are closer than ever to their financial breaking point. We hear it in our news cycles and see it in our bank accounts. With increasing mortgage payments and high inflation rates, employees are turning to their employers for help.

In the autumn of 2023, the results of the 15th Annual National Payroll Institute online survey of over 1,500 Canadians, conducted by the Financial Wellness Lab, revealed personal finances to be far more ominous than anticipated.

The report found that 66 percent of people who reported being financially stressed are living paycheque to paycheque, while nearly half of those who report being financially stressed earn over $100,000 per year.

Money isn’t going as far as it once did. Income growth in North America has not been able to keep up with inflation, increased borrowing costs and hefty child care fees. Some suggest that an annual income of $150,000 Cdn per household isn’t even enough to get by as a part of the “new” middle class, particularly for those living in a major metropolitan area.

A Pollara Middle Class tracking study found that 92 percent of Canadians earning more than $150,000 self-identify as middle class, with 43 percent of people who self-identify as middle class saying they’re just getting by, and 15 percent reporting that they are falling behind on their monthly expenses.

A call for help

In 2019, an Eckler survey revealed that, although 80 percent of employees want to receive financial education in the workplace, only 58 percent of employers offer this service to their staff.

Although no employer is obligated to provide financial literacy training, Jessica Moorhouse, Accredited Financial Counselor-Canada®, money expert, speaker, and host of the More Money Podcast, suggests that employers who want to stay competitive and stand out when recruiting new employees could offer some financial education to help them attract and retain better talent.

The business benefits of financial literacy at work

The connection between employee wellness and productivity highlights that employee financial stress is not just a personal issue; it impacts employees and their organizations.

In addition to increasing feelings of isolation and stress at home, the 2023 National Payroll Institute report also indicated that 40 percent of those surveyed believe their financial struggles erode their productivity at work.

Moorhouse reiterates how having more financially literate employees benefits the employer. “These employees will be less stressed, more productive, and less likely to come to the employer asking for additional financial aid, such as pay advances,” says Moorhouse, adding, “Money is one of the biggest stressors in people’s lives, so if employees feel like they have more of a handle on their finances, they will be less stressed, more optimistic about their future, and likely will be more productive in their jobs because their well-being is in a better place.”

Practical Tips to Improve Financial Literacy at Work

There are several ways for an organization to support the financial literacy of its employees. This can include financial education, such as:

  1. Q&A sessions with industry experts

  2. Virtual financial education with a focus on flexibility, user-friendliness, and time efficiency

  3. Budgeting tips

  4. Information on maximizing company health and wellness benefits

  5. Practical education on company-wide savings plans

Some companies encourage participation by allowing employees to complete such training during paid work hours and offering bonuses, vacation time or even gift cards in return for attendance at employer-sponsored financial education programs.

Moorhouse suggests that while “conducting lunch and learn presentations with experts in the field is a great start, too many organizations hire representatives from companies they work with, such as the insurance provider they use or mutual fund company they use for their Group RRSP.” Instead, she says, “Hiring outside experts who are less biased is a better approach.”

In addition to financial literacy presentations, Moorhouse encourages companies to attain licences for financial courses and maintain a library of personal finance books for employees to borrow.

She also suggests that another excellent financial literacy benefit employers can provide is free appointments with a financial planner or financial counsellor for employees to go over their finances. These professionals should be third parties who will not divulge information to the company.

Since each person has unique financial obligations, this type of individualized approach may be more helpful to employees under financial stress than theory-based financial education.

Reducing stigma

Moorhouse is an advocate for anonymity, which is an important piece in staff buy-in for financial literacy programming. Financial hardship is stigmatized, and it can be overwhelming to talk about personal financial issues in front of colleagues, so the option of education with anonymity will help more people get the help they need.

She says that it’s common for people to be fearful that their employer finding out about their financial struggles will limit their mobility in the organization, including promotions, raises or high-profile projects.

Financial wellness is workplace wellness

While strides are being made in the public education system to address financial literacy for the next generation of professionals, these efforts do not help today’s workforce. Investing in staff and their financial literacy will support staff to have improved financial peace of mind and focus on their productivity while on the job. This can be considered as a part of any workplace’s wellness program.

Does your organization offer financial literacy training for employees?

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