Mind over money matters?

The toll financial problems take on employees’ health is becoming better understood

Mind over money matters?

This article was produced in partnership with Beneva.

The old adage may tell us “mind over matter,” but does this work when it comes to financial woes?

More and more, the consensus is that it does not: money is a well-known cause of stress and from paying bills, to investing for retirement, to many a spousal spat, in Canada financial problems eclipse work, personal, and health concerns.

The knowledge and skills required to master personal finances are not easy to gain — look at the widespread use of financial security advisors — and in this economic climate, changes are at least some of your employees are experiencing money struggles. Beneva dives into how this situation impacts them personally and professionally and offers some possible solutions for helping them.

Breaking down the numbers

Many Canadians experience financial stress, from finding budgeting a challenge, whether it be creating one or sticking to it, to seeing retirement as a pipe dream and therefore avoiding planning for it. While it’s not all doom and gloom — 64% do have a three-month emergency fund squirrelled away — many live pay cheque to pay cheque, making finding extra money for savings and investments difficult, and the statistics paint a sobering picture.

  • 5% of Canadians feel overwhelmed by debt.
  • 48% suffer from insomnia due to their economic problems.
  • 43% delay their retirement since they don’t have enough savings.
  • 35% spend their entire pay cheque, if not more.

As inflation continues its upward trend, debt levels grow alongside it, and while this common problem should be addressed at a societal level it’s often seen as a taboo topic. Even if they’re deeply in debt, a study by LifeWorks found that 61% of Canadians won’t ask for financial advice. There’s a stigma around financial insecurity: people are afraid of being labelled if they speak up, which contributes to feelings of isolation and a culture of secrecy.

The consequences of bringing financial worries to work

When someone can’t make ends meet, they’re weighed down by that worry. The stress interferes with their concentration and distracts them from their work. It also increases their risk of falling ill or experiencing other ailments that impact their physical and mental health, such as anxiety, depression, high blood pressure, heart disease, trouble sleeping, and headaches.

In the end, the compounding effects of financial stress negatively impact your organization. Working while distracted increases the risk of errors and accidents, can lead to bad decision making, and overall hurts productivity — which is costly. Again, the facts speak for themselves: taking an organization of 200 as an example, they’ll face employees who average 3.5 hours working while distracted per week, adding up to 7,521 hours lost per year and a financial toll of $208,031.

Even without the mathematical breakdown, you’ve likely noticed that financial stress manifests in increased absences and sick days, higher employee turnover, lower employee engagement, and more strained labour relations. Money problems may be viewed as deeply personal, but they have a ripple effect into the workplace and that makes human resources management more complex.

How can you transform financial stress into financial well-being?  

There’s no question financial stress is an issue for employers, but what are some potential solutions? It comes down to supporting the well-being of your staff, in all spheres, and that starts with knowing how to read the signs of economic insecurity.

Provide managers and HR teams with training. They are your eyes and ears on the ground, and ultimately your first responders. Above all, ensure that tact and kindness are always the default because it’s that approach that will build trust and allow people to overcome the fear of being judged or stigmatized for their finances.  

Investing in the financial well-being of employees is investing in the well-being of the company as a whole, so creating a plan that confronts and contains the spillover of money management issues is paramount. Reduce the impact of these worries on your organization and see the results, beginning with reduced absenteeism and increased productivity, by taking the bull by the horns.

Examine what you offer your staff, above and beyond a pay cheque. Do you have a pension plan? Any other financial benefits that could help alleviate some of the pressure they’re feeling? Review overall compensation in your organization and consider various options that can help improve their financial situation (without hurting the organization’s, of course).

This can look like enhanced — or better explained — group benefits, vacation and leave time, a pension plan to which the company could contribute, a share purchase plan through pay deductions, parking spaces, company discounts on products or services, or the use of a company car. But to get to the root of the issue, education is critical. Most employee assistance programs (EAPs) offer the services of experienced financial security advisors that can guide employees — lean on those experts. If your organization doesn’t have an EAP there are other solutions. Consider periodic presentations on financial management, financial education activities such as quizzes, and referrals to professional resources. There are a number of topics to touch on and ways to deliver the message so don’t be afraid to get creative and make it an engaging process.

Quality over quantity

Most importantly, before committing to any program for improving employee financial knowledge, find out what they feel they need to learn to put their affairs in order. From budgeting, savings, loans, and financial planning to significant life events like buying a home, starting a family, separating or divorcing, paying for a child’s education, or looking to retirement, finances include many aspects of our lives. You’ll get the best return on this investment if you take the time to drill down and target topics that best address the concerns of your employees.

Employers don’t need to spend a lot of time or money to offer a comprehensive financial well-being program. Choose quality over quantity, meet employees with empathy and resources, and watch the positive transformation both of your people and your business.

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