Financial Education: Small Benefit with Big Impacts

Do you notice your shoulders tensing, your palms sweating, or your heart racing when thinking about your finances? Is there anything that occupies your mind so much of the time, you’d label it constant? Over 65% of Canadians report being stressed about money constantly. It’s not just you; that financial stress could be costing your business thousands of dollars per employee each year. It’s been reported that financial stress among younger Canadians is impacting their workplace productivity by almost 30%.

This is likely related to the fact that consumer debt has grown to record levels and savings rates are virtually non-existent for a large portion of the workforce. Couple these statistics with the reality that there is very little formal financial education provided in our country, and you can’t help but recognize a very serious concern and clear need of financial literacy and education in the workplace.

Are your employees in need? Even if they don’t ask, I’m willing to bet financial education and support would be met with a (huge) sigh of relief. It’s been shown that employers who implement some form of financial education in the workplace get a 3:1 return on their investment.

Financial education starts by helping employees understand how their employee benefit program is a key component in their finances. A great plan will also show that true financial success comes from understanding more than just the benefit program from work. Financial education helps employees achieve financial success by blending their benefit plans at work and in their personal financial affairs.

Rather than offering education that focuses solely on how to enroll in the plan, employers need to offer comprehensive financial education programs that cover a variety of personal finance concepts. Workplace education programs are most effective when they feature multiple sessions on topics such as money management, debt management and retirement planning rather than just a single, “one-off” session- in fact, workplace programs offering multiple sessions on a variety of topics are far more effective.

“Earning a good salary is important, but many employees also want to have a sense of long-term financial wellbeing. This peace of mind improves job satisfaction and employee productivity,” says Monica Mazun, Associate Investment Advisor with The Mactaggart Hryn Team of Richardson Wealth Limited. “Employers have several tools at their disposal to help their staff feel financially secure, including matching RRSP contributions, which can be a better tax decision than a traditional bonus. They can also provide group life insurance programs, promote financial counselling that is available through many group health insurance plans, and encourage employees to meet with an investment professional who can help them put the best savings program in place.”

Offering face to face meetings with a qualified industry professional along with group sessions has been shown to be particularly effective in increasing both financial literacy and personal savings rates. Each of these factors contributes to creating a more educated employee, greater financial stability, and a brighter financial outlook in retirement.

With so many changes in the financial industry over the past few years, so many different savings and investment vehicles currently available and so many opportunities to spend rather than save, it’s no wonder that many Canadians feel out of their depth when it comes to managing their personal finances.

Offering quality financial education at work doesn’t have to be complicated or expensive for employers. Focus on finding an advisor with a sincere desire to help others and an interest in demystifying the world of saving and investing. Then, let their expertise bring added value to your plan and your employees.

In addition to the numbers, stress of any kind causes or exacerbates a variety of health issues, which not only hurts your business with high turnover rates and poor retention, but more importantly, they hurt your greatest asset: your employees.

The good news is that you don’t need to create your own financial program from scratch. There are many existing programs that you can bring into your workplace — either in person, online, or a mix of both.

Ultimately, when your employees have a better grasp of their financial situation, they’ll be better equipped to use the benefits you’re offering. And when employees feel better about their finances and have the security they need, everyone benefits.

Less stressed, more productive, more engaged, and savvier employees? That makes dollars and sense.

Photo by Kelly Sikkema on Unsplash