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3 Action Steps Employers Can Take to Reduce Employee Financial Stress and Increase Financial Literacy
How can you assist your employees in achieving financial wellbeing?
November is Financial Literacy Month in Canada, and one of the key themes for 2021 is the importance of building financial resilience in challenging times.
When it comes to promoting employee wellbeing, we often think of health and dental benefit programs, offerings related to health and fitness, or certain elements of corporate culture. What we might not initially consider to be part of employee wellbeing is Financial Wellbeing. However, as one study after another shows us, money is the primary source of stress for most people. The 2021 Benefits Canada Healthcare Survey confirmed this once again, with 36% of respondents listing ‘finances’ as their primary source of stress.
So, we know that our teams are worrying about money. But how can you, as an employer, help to reduce employee stress over money matters? Can you play a role in promoting financial wellbeing?
What does Financial Wellbeing mean and how do you know if you have achieved this?
The theme for Canada’s financial literacy month this year is building financial resiliency, which essentially means the ability to withstand unexpected or difficult financial situations.
“Financial well-being describes a condition wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life. It’s determined by the extent to which people feel that they:
- Have control over day-to-day, month-to-month finances
- Have the capacity to absorb a financial shock
- Are on track to meet his or her financial goals
- Have the financial freedom to make the choices that allow one to enjoy life”
Most people would agree that not worrying about money or their financial futures would help ease a lot of stress. Employers can certainly play a role, which starts with a commitment to employees to address this major source of stress.
Steps Employers can take to help employees achieve Financial Wellbeing
You may think the obvious answer is ‘pay employees higher wages’ but there are steps beyond this sentiment. In addition to paying competitive wages (which certainly matters!) employers should consider providing employees with two things: direct access to savings plans and financial education opportunities.
Group Savings Programs provide your employees the opportunity to save for the future
At the Immix Group, we believe that all employees deserve to have Group Savings programs included as part of their comprehensive benefits offering. These are very easy to set up, are low maintenance to administer, and additionally, they can be very low cost.
A Group Savings plan could be as simple as allowing employees to directly save into a RRSP or TFSA from their paycheque; there is no requirement to provide an Employer match. However, assisting employees in saving for the future by providing an Employer deposit is a major advantage. Because you can make changes to a Group Savings Plan easily and at any time, you can always revisit the amount of funds you are providing. Your deposits provide tax advantages to both the employee and the business, so it really makes sense to funnel money in this direction, as a form of increased compensation, rather than a straight pay raise.
As an added bonus, offering a group Savings Plan is a key tool in recruiting and keeping the best employees. It’s a win-win.
How can I help my Employees to improve their financial literacy?
Firstly, financial literacy simply refers to one’s “ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.” Unfortunately, many people never receive education in these matters, despite how crucial they are to success, and ultimately, financial wellbeing.
Partnering with experts and offering employees financial education in a range of areas should be part of your comprehensive benefits offering. At the Immix Group, we have access to a whole team of licensed professional advisors, who understand the challenges that employees face, and can provide simple and tangible solutions and action steps. Advisors are even able to work one-on-one with employees and help them to develop their own financial plans.
Once is not enough; employee education needs to be ongoing
As part of Immix Group’s 7-Step Process we ensure education is available to employees on an ongoing basis. In addition to providing in-person or online education sessions, we have plenty of resources available to help employees in managing their financial lives.
Why should Employers worry about Employee Financial Wellbeing?
If your goal as an organization is to improve employee wellbeing, quite simply, you need to focus on the areas that are causing the most stress. We believe that taking some simple steps can be a big help to employees who are struggling to save, struggling to understand how to mange their finances and plan for the future, or who lack the basic financial literacy that is needed in our world.
To sum it up, the action steps Employers can take to help employee financial wellbeing:
- Ensure you are paying competitive wages for your industry and region
- Engage with a trusted benefits advisor to assist in designing and implementing a groups savings plan
- Work with your advisor to ensure employees are provided ongoing financial education opportunities, and one-on-one support
At the Immix Group, work with companies of all sizes to implement simple yet effective solutions when it comes to employee benefit programs, including employee group savings plans. If you would like to discuss ways to help improve your employees Financial Wellbeing, please reach out.
Any questions, please feel welcome to reach out to me at email@example.com.
Disclaimer: All organizations and groups are different and applicable strategies should be reviewed with a licensed benefits advisor to review your situation.
For more articles, please visit our sister company Ciccone McKay Financial Group for a wealth of articles on budgeting, goal-based planning, navigating market turbulence, as well as a blog dedicated to financial literacy.
Financial Planning Blog Articles: https://ciccone-mckay.com/blog.html
Financial Literacy: https://www.ciccone-mckay.com/financial-literacy.php
Market Commentary: https://www.ciccone-mckay.com/market-commentary.html
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