Supporting Employees’ Financial Wellbeing is Key to Productivity and Innovation
Whether we are feeling anxiety about paying the rent, having savings to cover emergencies, or worrying about retirement, financial stress is a major contributor to our overall wellbeing.
If money worries keep employees up at night, how productive are they during the day? According to a study conducted by the Canadian Payroll Association, almost half of working Canadians admit that financial stress affects their performance. PricewaterhouseCoopers found that financially stressed employees are five times more likely to be distracted at work while 46% spend three hours or more a week dealing with financial issues. Workers with high levels of financial stress are twice as likely to use sick time when they are not ill. COVID has only amplified these issues for many people.
There is clear evidence that financial wellbeing and company performance are strongly linked. This infographic from the Financial Consumer Agency of Canada paints a compelling picture: a company with 200 employees will likely lose over $200,000 every year due to lost productivity caused by employees dealing with financial stress. It can lead to more absences and sick leave, increased turnover, lower morale, and poor decision making.
Increasingly, employers feel responsible for employees’ financial wellbeing. Some are taking bold steps: C.F. Crozier & Associates Inc., with 200 employees across Ontario, recently introduced the First-Time Home Buyers’ Assistance Program which provides staff that have been with the company at least a year with up to $20,000 to help them buy their first home – provided they commit to staying for three more years.
Crozier’s President Nick Mocan said the idea came after conversations with employees. During routine check-ins, the issue kept coming up.
“People were starting families or were ready to get into the market so acquiring a home became a real priority, but they were locked out. Hearing the anxiety in their voices I thought, if you’re coming to work with this level of anxiety, you can’t be at the top of your game, it’s not possible,” he says.
The program immediately gained traction with Crozier’s employees. “Our First-Time Home Buyer’s Assistance Program was carefully considered by the leadership team, budgeted and analysed before it was introduced to the company. At its core, the program is a way for us to invest in our people and demonstrate that our employees’ personal growth is as important as their career growth. The engagement and positive reaction from employees, partners, clients and nationally has been so key – especially as we continue to grow and add to our teams.”
A simple commitment to top-down communication that led to a ground-breaking program that made national headlines. Communication doesn’t mean prying but creating a trusted space for conversations. When managers understand the individual financial needs of employees, they can structure compensation, work demands and opportunities accordingly. This means having flexible policies: one person may value extra time off for overtime, while another would benefit by being paid for that time.
A pension, or group retirement savings plan (GRSP) for small business is another proven way for employers to offer their employees financial stability and a way to save money for retirement. A GRSP is designed to encourage employees to save at work by contributing through payroll deductions. Both the employer and the employee may contribute depending on the rules of the plan. Like an individual RRSP, contributions (by employees and employers) are tax deductible, and employees can decide how the money is invested. Employees benefit from low fees and immediate tax savings through payroll deductions. Employers benefit from employee peace of mind, loyalty, and productivity.
Employee Assistance Programs (EAPs) also provide a variety of mental health supports including financial education and counselling services. Many people may not have experience with budgeting or saving, and a little coaching can go a long way. EAPs can be introduced to most extended health benefit programs and easily pay for themselves.
Peace of mind might be the best benefit an employer can provide.