The crisis will intensify financial stress for everyone – here's how employers can help alleviate the burden
The repercussions of the COVID-19 crisis continue to threaten Canada’s “return to stability,” but helping Canadian workers achieve financial wellness can alleviate its economic impact.
“COVID-19 has directly affected the financial stress of working Canadians,” said Peter Tzanetakis, president of the Canadian Payroll Association. “Many of whom express deep concern about the economy as a whole.”
Nearly three in five Canadians are stressed about their financial situation because of the pandemic, while a similar number are concerned about the economy, a recent CPA survey suggests.
More than half of workers surveyed (54%) also report seeing the financial toll of COVID-19 on their organization. But the stress and anxiety they feel over their own economic future are also adding to the pressure that businesses face.
Read more: 70% of employees worry about money at work
Workers spend an average of 40 minutes a day worrying about personal financial setbacks at work – and this costs Canadian businesses an estimated $16bn in lost productivity, according to the CPA.
These are workers who often save little to none of their salary, have an increasing debt load, and are easily derailed when they miss a paycheque or face work disruptions amid the pandemic.
“Recognizing that financial stress already costs Canadian businesses billions of dollars, developing strategies to help Canadians decrease or manage that stress should be a part of our broader strategy for economic recovery,” Tzanetakis said.
Pay yourself first
Employees can start small.
‘Pay Yourself First’ programs, for example, help them take a snippet of their pay and deposit it automatically into a savings account. More than half of Canadian employers (55%) already offer these programs, the CPA found.
Unlike a manual fund transfer, the automated process “results in better money management, a higher rate of savings, and a steady accumulation of retirement funds,” the association said.
But apart from encouraging workers to “pay themselves first” and save, HR and payroll managers can also offer financial education and coaching programs to promote greater financial wellness.
A 2019 study from the CPA showed 79% of employees are interested in learning more about better budgeting and saving for the future, and they look to their employers to take the lead.
Focusing on financial wellness is more important than ever, according to CPA Chair Wendy Doane.
“Whether [employees] have been forced to dip into their savings or missed a paycheque, the recent crisis will intensify financial stress for everyone,” Doane said.
“Much like mental health, for Canadian businesses struggling to identify strategic advantages in a very competitive business environment, actively addressing the financial wellness of employees could provide a competitive edge and deliver bottom-line results,” she said.
Read more: Financial worry: When should HR step in?
Room for improvement
There is, after all, a correlation between an employee’s financial wellness and their mental health.
“On an individualistic level, poor financial wellness impacts upon employee mental health, on their stress and anxiety levels. This in turn impacts on engagement in the company, workplace morale and overall productivity,” said Karen Hall, VP, financial education and employer services, at TE Wealth.
“Whilst there’s so much good work going on to help employees deal with their mental health and their worries in the workplace, in reality this is really aimed at those few higher-income workers,” Hall told HRD.
“For the lower-income subsection of the employment sphere, these worries are a daily prevalence – and one which is almost impossible to deal with,” she said.
There is still plenty of room for improvement, Tzanetakis said as he encouraged employers to “use the expertise in their payroll departments” to establish a financial wellness plan for their workers.
“It really does contribute to an alleviation of some financial stress if you’re not worrying about savings as much,” he said.