January is financial wellness month: aptly named in recognition of the excessive spending that usually accompanies the December holidays. And, for those in Canada at least, CPP and EI contributions are back at zero for the year, making your take home that much less valuable than it was for the last part of 2020.
Money is a common stressor for many. According to MarketWatch 73% of workers in the US live paycheck to paycheck and for every 10 people, three don’t have any form of emergency savings at all. Covid put a wrench in many people’s reliance on a steady income stream and instead, put thousands out of work and relying on credit to survive.
Financial worry can be crippling, causing lack of sleep, family conflict, and stress over always trying to figure out how to cover the basics, such as rent and groceries. Stress can lead to other mental health issues or poor lifestyle choices. At work, it can contribute to increased distraction (think: safety, risk mitigation) and lower productivity. It can also increase absenteeism, as well as the chances of theft or fraud within the workplace.
Employers have a great opportunity to add financial wellness programs to their overall wellness portfolio for team members. Just as regular wellness initiatives help keep employees happy, healthy, and productive, so can financial wellness programs. Depending on the program, they can also be significant new talent attractors (such as student loan repayment programs).
Awareness, education, and behaviour change are the keystones of any initiative, and financial wellness programs are no different. Raising awareness of how financial stress can negatively impact overall health and well-being, as well as impact overall work performance, is the first step in helping employees recognize how important financial well being is.
Education can become a significant component of any wellness program, and for employers, it can be an economical option. Many benefits and retirement providers are available to meet with staff to talk about leveraging employer matching retirement plans, and may also have other financial offerings such as basic budgeting, debt management, and other related courses.
In addition to education, there are some fabulous ideas out there that can help your employees relieve some of the financial stress they may be experiencing:
- Provide payroll loans at 0% to help employees pay student debts off faster
- Moving pay dates to be bi-weekly instead of bi-monthly or monthly
- Provide a one-on-one session with a financial planner for each employee
- Create a peer to peer financial program: employees meet and hold each other accountable to budgets and financial goals
- Set up automatic savings plans for employees tied to a specific goal: purchase of a car, down payment on a house, and so forth. Keep it as a payroll deduction of a set percentage each pay period, with an agreed-upon target total.
There are many ideas but all start with educating staff on financial principles and building a trusting relationship with your team that allows for open discussions around money. Providing information, resources, and tools that help your staff become more financially literate and help alleviate some of their financial woes will go a long way to creating a happier workforce.