The average Canadian spends approximately two hours a day worrying about their finances. Sixty-four percent of workers worry several times per month, and nine percent worry whenever a bill is due. Another 48% say they’ve lost sleep because of financial worries.
A survey conducted in 2021 revealed that 84% of Canadians are worried about the cost of living and inflation, and 54% are concerned about managing expenses. No doubt recent events have amplified these sources of worry. In January, inflation surpassed 5% for the first time since 1991.
The 2022 Canada’s Food Price Report notes that food prices will increase 5%-7% this year – the highest increase in twelve years of producing the report. The average family of four can expect to spend $1,000 more on groceries than they did in 2021 – increasing to $15,000 annually. The report also notes the increase in restaurant prices which could go as high as 8%.
Add to all of that the fact that the Bank of Canada just announced the biggest increase in the benchmark interest rate since 2000, and gas prices recently reached a 14-year high, it is understandable that employees are fearful.
Financial education and support can improve the health and performance of employees
When your employees are worried about money, it can affect their mental health and their performance at work. Poor financial health can result in lost productivity and increased stress load.
Employees experiencing financial stress are twice as likely to report poor overall health and four times as likely to report sleep problems, headaches and other illnesses, and they are at greater risk of developing more serious health problems, such as heart disease, high blood pressure and anxiety and depression.
Providing workers with advice and support on personal financial issues can improve performance by removing financial worry and stress. In a survey conducted by Towers Perrin, 76% of CEOs indicated that they believed workers would value receiving support from employers to improve financial wellbeing, yet, only 20% of workplaces are helping employees manage spending and debt.
Let employees know you care about their financial health
Financial health is determined by the way people manage their financial affairs, including how much money they are saving, and what percentage of income goes to fixed and discretionary spending.
Below are a few steps you can take to start increasing confidence and financial management skills in the workplace.
- Educate employees about the link between financial health and mental health. Financial stress and worry can negatively impact workers’ mental and physical health, relationships, and overall quality of life. The negative impacts of this stress can affect sleep, self-esteem, and energy levels, resulting in increased irritability, anger, shame, fear, anxiety and depression. Workers experiencing financial stress risk mental harm and lost time from work.
- Make sure you have resources and programs in place. Work with other leaders in your organization, such as HR leaders and workplace mental health facilitators to review or introduce programs and supports for workers’ financial health.
- Encourage use of your employee and family assistance program. Make sure your employee assistance program includes resources to encourage healthy financial habits and support for workers dealing with overwhelming debt and other financial challenges.
- Recognize that poor financial health is also a real issue for leaders, too. Financial concerns can affect anyone – even those earning a higher salary. CEOs and senior leaders may be reluctant to ask for support because of their salary or title. Be sure that resources and supports exist for everyone in the organization.
- Reduce stigma. It used to be that talking about personal finance in the workplace was taboo. Thankfully, this is changing. While employees should only divulge personal information with qualified professionals, they can certainly engage in healthy conversations with peers about financial management best practices to increase their confidence and success.
- Invite experts on financial health into the workplace to increase awareness and educate employees. Experts suggest educating workers to promote behavioural change, such as helping them define what percentage of their salary will be for bills, savings, and discretionary spending each month can go a long way.
Bringing this conversation into your workplace will not only provide much needed support, it will ensure that you are protecting employees and your business from the negative impacts of financial insecurity.
Get to know the author – Dr. Bill Howatt