Financial literacy is the set of skills and knowledge that allows us to manage our money more effectively. Not having been taught the skills to take charge of our personal finances in school or at home Canadians, both low and high income earners from a wide variety of backgrounds, struggle with money management.
Why is financial literacy important to employers?
Financial stress impacts both mental and physical health, resulting in decreased productivity at the workplace. According to a study published by the Canadian Payroll Association, 50 % of Canadians dealing with financial stress, say it has affected their on-the-job performance. More Canadians from every socioeconomic background are living beyond their means and debt levels are the highest among developed countries, surpassing those of our neighbors to the south. The burden this places on a couple’s relationship and family life can not be escaped during working hours.
What can employers do?
Since adults spend most of their waking hours at work, employers are uniquely positioned to reach individuals and help them address their financial stress. Building a culture of well-being is a top aspiration for many employers. While most wellness programs provide solutions that address physical and mental health, few focus on financial literacy which has a direct impact on the latter. The objective of financial wellness programs is to help employees build their knowledge and confidence, allowing them to take actions regarding their financial health.
While planning for retirement is important, financial literacy goes far beyond offering a pension plan and encompasses topics such as:
- Putting together a personal or family budget
- Managing debt and credit scores
- Learning when to spend vs save
Developing a suite of tools to help employees improve financial literacy may not be as difficult or costly as employers expect. Many of the employee benefits vendors you already deal with can deliver on-site or virtual training and workshops to employees at no additional cost. For example, benefit brokers, insurers/record-keepers and Employee Assistance Programs (EAPs) are typically staffed to deliver such training. EAPs often make available articles, tips and tools that employees can use on demand. The Financial Consumer Agency of Canada also publishes ready-to-use content, including videos, calculators and other tools; and is particularly active in November as it is Canada’s financial literacy month.
Need help putting together a financial wellness plan?
Vita Assure is committed to helping employers offer programs that are more relevant and in-touch with employees’ needs. More than ever, financial problems are a leading cause of stress. Employers can benefit from introducing solutions to assist employees.
Reach out to an advisor to find out how to turn resources already at your disposable into a formal, well-structured and effectively communicated financial wellness program.