Maybe “money can’t buy happiness” but money can significantly impact employee wellbeing.
According to a 2023 PWC study, 57% of respondents pinpointed money worries as the leading source of stress in their lives. What’s more, a study by FP Canada showed that 36% of Canadians who experience financial stress also deal with mental health challenges such as depression. As a result, more Canadians (48%) are losing sleep over financial matters compared to previous years (43%).
What does this mean for HR? It means employee financial health can no longer be ignored. Financial stress doesn’t just hurt employees’ personal lives, it spills over into the workplace, eroding productivity, creativity, collaboration, and overall engagement. A recent survey even discovered that people with financial anxiety are five times more likely to be distracted at work.
Money Talks so Let’s Talk Money
January 24 is Bell Let’s Talk Day, a dedicated time to spread awareness around the importance of mental health and wellbeing. In honour of this day – and given that financial wellness is a key aspect of mental wellbeing – we’ll explore four strategies HR can implement for improved financial health in the workplace.
- Pay Reviews: In today’s challenging economy, ensuring fair compensation is not just a luxury, it’s a necessity for maintaining a thriving workforce. That’s why it’s crucial to routinely reassess your compensation package. Equally important, is the implementation of cost-of-living adjustments to account for rising living expenses caused by inflation. This proactive approach will not only help you attract and retain top-tier talent but also ensure employees remain engaged. Remarkably, a study revealed that employees exhibited a 15% increase in engagement when employers offered these raises.
- Maximize Benefits: Gimmicky perks – move over. Financial wellbeing benefits are taking centre stage. Be sure employees are aware of the full suite of existing financial benefits available to them such as retirement savings, pension plans, health saving accounts, bonus plans, EAPs – that may feature financial tools and financial counseling – comprehensive insurance coverage (including dental and vision benefits) and other employee discounts.
Additionally, consider introducing other valuable financial benefits like cash awards (given to employees in the form of money or stocks options), hardship grants or loan programs (that offers financial aid to workers experiencing severe financial difficulties) and paychecks on demand programs (which allow employees to access a portion of their earned wages before regular payday).
- Financial Wellness Programs: Did you know that 77% of workers consider financial wellness programs to be a crucial benefit, yet only 28% of employers actually offer them? If your company doesn’t already have a financial wellness program in place, now could be the perfect time to start one. By doing so, you can provide your employees with a wide range of financial resources, such as access to free budget tools and guides that cover essential topics like financial literacy and other key aspects of financial education. To ensure the success of your program, you can collaborate with an in-house expert to organize lunch and learn sessions or even invite a specialized firm to educate your employees on achieving financial wellbeing.
- Open Communication: Alleviating financial worry doesn’t always require a new program, perk or pay increase. Financial stress extends to employees of all salary ranges. Even among employees earning at least $100,000 per year, 47% are stressed about their finances. In a world filled with stories about layoffs and budget cuts, sometimes supporting financial wellbeing just means more timely and transparent communication from leaders around the state of the business and what the future holds for the workforce.
HR can also work to reduce the stigma associated with seeking financial help by having more candid conversations with employees and reminding staff that all financial services are confidential.
Bottom line: Financial health matters and impacts everyone including employees and businesses. Consider using these strategies and prioritizing employee financial wellbeing to help support your workforce more holistically.
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