New data paints a morose picture for financial health in Canadian workplaces
Canadians’ finances are taking a hit amid the current economic situation. In fact, only one in five (21%) workers say their financial situation is strong, according to new data from Manulife.
Meanwhile, two in five (40%) say it's fair to poor. More than half of respondents (53%) worry a great deal about one or more aspects of their personal finances.
"Just when the pandemic was finally giving way, Canadians were faced with a barrage of challenging economic concerns,” says Aimee DeCamillo, head of global retirement, Manulife Investment Management. “Our survey shows not only how it negatively impacted their personal finances and mental health but also offered evidence of what might be done to counteract the uncertainty.”
One in six North American employees are more stressed about their personal finances today than they were last year, with this culture of anxiety leading to a productivity slump, according to a previous report from Ceridian.
Poor financial health
Seventy percent of Canadians are worried about the economy, according to the Manulife Retirement survey: Stress, finances, and well-being, based on a survey of 1,551 Canadians, conducted Nov. 8 to Dec. 22, 2022.
The most frequently cited issues include; concerns about the impact of inflation on cost of living (61%), rising interest rates (46%) and economic conditions in general (42%). Also, a huge majority of workers report increased spending on groceries (98%), household basics (89%), gas (86%) and monthly bill payments (79%).
Many Canadians also worry about credit card debt (40%), not having enough emergency savings (30%) and not having enough retirement savings (29%). Canadians now believe they’ll need close to $2 million stashed away in retirement funds, up from 20% in 2020, according to a previous BMO report.
Mental health concerns
The challenging economic backdrop has had an impact on the mental wellbeing of four in five (79%) respondents, with 24% saying it's had a major impact, according to Manulife.
Seventy-one percent of employees say their mental health has interfered with their ability to work in the past year. Four in five worry about their finances while they're working, and nearly one in three say they worry often.
Half of those who worry say they'd be more productive at work if they were less worried.
These financial troubles can also be a problem for employers; financial stress can cost employers close to $2,000 ($1,786) per employee in lost productivity and absenteeism.
This can sum up to $178,600 for small employers with 10 to 100 employees, up to $891,214 for medium-size businesses with 101 to 499 employees, and more than $893,000 for large employers with 500 employees or more, according to the report.
Amid all these troubles, employees believe their employer can help them out. In fact, they think financial wellness programs reduce their financial stress (79%).
Providing this can also make workers more likely to stay with their employer (75%), more likely to recommend that someone consider working for the company (73%) and make them more productive (66%).
However, only half of Canadians say their employer offers a program and one in four (25%) are unsure if they have one.
"While our findings show Canadian workers' financial and mental health is low, the good news is that we can see what helps," says Brett Marchand, head of group retirement, Canada, Manulife. "Greater engagement—through financial wellness programs and professional financial advice—can help employees manage financial stress and improve mental health, while helping their employers with talent acquisition and retention, productivity, and the bottom line."
Also, here are some fundamental financial goals companies can encourage employees to dial into this year, as Marthin De Beer, CEO & Founder of BrightPlan and a former executive at Cisco, says in a Forbes article:
- Building an emergency plan.
- Chipping away at high-interest debt.
- Having a disciplined savings plan.
- Reducing taxes.