Financial stress is affecting the workplace
Financial education and literacy have become hot topics for the simple reason that many Canadians are not well equipped with the financial knowledge to make good decisions about the money. In fact, this problem is not just isolated in Canada but it is an international concern.
Did you know . . .
- 55% of people are stressed about money?
- 42% of Canadians lack basic financial literacy
- 70% of people live paycheque to paycheque
- debt is rising faster than income and assets
- Canadians are on average spending 25% more than their incomes?
- 2009 had the highest number of personal bankruptcies in history (up 28.4%)
These statistics create serious concerns. So much so that the Canadian Government has created a task force on Financial Literacy. Canada is simply following what has already happened in other countries like Australia, the US, and the UK. Financial problems are the leading causes of stress. Hopefully, this National Task Force is the first step in addressing these critical issues.
Financial stress in the workplace
Money problems have become the biggest contributor to personal stress and it has started to affect productivity in the workplace. Consider some more statistics:
- Money is the number one cause of stress for employees
- 40% of people say that money stress is affecting their productivity at work
- Employers who implement some form of financial education in the workplace get a 3:1 return on their investment
- Financial stress is impacting employers bottom line
People who are financially stressed can’t keep it away from the workplace, which leads to more lateness, absenteeism, stress leaves, higher claims on benefit plans, employee turnover, decreased morale and avoidable mistakes. Using company time (as much as 5 hours a week) to deal with personal financial issues is a big problem affecting workplace productivity. These problems are overwhelmingly brought about by financial illiteracy.
Employers need to rethink corporate benefit plans and incorporate Financial Education as an essential part of those benefit plans. Traditionally, from a financial perspective, benefit plans focus on product and plan education. Innovative companies are now incorporating health and financial wellness into their benefit programs, but generally, there is still a void in Financial Education.
There is a tremendous amount of research confirming that when you improve financial literacy for the employee, it brings tangible benefits to both the employers and employees. Financial Education should be at the core of any financial benefit plan. Aligning the employer, employee, and the benefit plan is essential for the financial and professional success of your organization.
There is a massive appetite for Financial Education especially given the demographics. Employees will appreciate employers who help them take control of their money not only through traditional benefit plans but also through financial knowledge and education.
Congratulations on a concise summary of the “financial stress at work” challenge. Very real. We see it daily at the Institute. In addition, I agree that financial literacy skills need greater sensitivity in their promotion and linkage to a truly practical and engaging employee value proposition.
Best regards .. Richard Earle, Ph.D.
As a personal financial coach, I can attest to the financial stress. I have tried to convince business owners to address this issue head on to no avail.
One small business owner agreed but then could not get his employees to buy in.