In today’s workplace, financial wellbeing has become a crucial aspect of employee satisfaction and productivity. As organizations strive to support their workforce, understanding and promoting financial wellbeing can unlock the full potential of employees, leading to greater engagement, resilience, and overall success.
Understanding Financial Wellbeing
Financial wellbeing encompasses more than just having enough money to cover expenses. It includes a sense of security and confidence in one’s financial situation, as well as access to professional help. Financial wellbeing can be broken down into three key components: financial security, financial confidence, and financial access.
- Financial Security: This refers to whether individuals feel secure in their financial situations or if they are anxious about money. Many Canadians experience a spectrum of positive and negative relationships with money, with a significant number spending a lot of time worrying about their financial stability.
- Financial Confidence: This involves individuals’ confidence in managing their own financial matters. Financial confidence has been decreasing over the past year due to rising living costs, interest rates, and home affordability issues. Employers can play a vital role in boosting financial confidence by providing tools and resources such as calculators and budgeting tools.
- Financial Access: This pertains to the accessibility of professional financial help. Many Canadians are unsure where to turn for financial advice or believe they cannot afford it. Employers can help bridge this gap by offering access to unbiased financial advice through group programs.
The Role of Employers in Promoting Financial Wellbeing
Employers have a unique opportunity to support their employees’ financial wellbeing. Hubbell emphasizes that employees often view their employers as a reliable source of help and trust them to act in their best interests. This trust places a responsibility on employers to provide programs and solutions that address financial insecurity.
- Providing Financial Education: Employers can offer financial education sessions to help employees understand budgeting, saving, and managing debt. These sessions can empower employees with the knowledge they need to make informed financial decisions.
- Offering Financial Tools and Resources: By providing access to financial calculators, budgeting tools, and other resources, employers can help employees gain financial confidence and plan for their future.
- Facilitating Access to Financial Advice: Employers can connect employees with professional financial advisors through group programs. This can help employees access unbiased financial advice without the fear of high costs or sales tactics.
Check out our upcoming event on February 4, 2025:Beyond Budgeting – The Fundamentals of Financial Wellbeing
Financial Wellbeing in Canada
Data provides a snapshot of Canadians’ financial wellbeing:
- Debt Management: A 2024 survey by the Angus Reid Institute found that 37% of Canadians are struggling to manage their debt, with many relying on credit to cover day-to-day expenses.
- Emergency Savings: According to a 2023 report by the Bank of Canada, only 45% of Canadians have an emergency fund that could cover three months of expenses.
- Financial Stress: A 2023 survey by Benefits Canada found that 47% of Canadians equate financial wellness with living without financial stress.
- Budgeting Practices: According to the 2019 Canadian Financial Capability Survey, about 49% of Canadians reported following a budget, reflecting a gradual increase in budgeting awareness compared to previous years. Budgeting remains a critical tool for managing finances and reducing financial stress.
These statistics underscore the importance of financial literacy and the need for ongoing education and support to help Canadians achieve better financial wellbeing.
The Impact of Financial Wellbeing
Promoting financial wellbeing in the workplace has far-reaching benefits. Employees who feel financially secure are more likely to be engaged, productive, and loyal to their employers. They are also better equipped to handle stress and less likely to experience burnout. By investing in their employees’ financial health, organizations can create a more resilient and motivated workforce.
Moreover, financial wellbeing is closely linked to overall wellbeing. When employees are not preoccupied with financial worries, they can focus more on their work and personal lives, leading to improved mental and physical health. This holistic approach to wellbeing can enhance the overall employee experience and contribute to a positive workplace culture.
Conclusion
The workplace demands a comprehensive approach to employee wellbeing, with financial wellbeing playing a crucial role. By understanding and promoting financial literacy, organizations can help their employees build resilience and achieve greater financial security. This, in turn, leads to a more engaged, productive, and satisfied workforce.
It’s essential for employers to prioritize financial wellbeing and provide the necessary resources and support. At Thorpe Benefits, we are dedicated to helping our clients navigate these challenges and create a thriving workplace. Join us for our upcoming financial wellbeing education sessions and explore how we can support your organization’s journey towards financial health and resilience.
Inspired by Interview with Jason Hubbell
Vice President, Sales & Distribution – Group Retirement from Open Access Ltd
References
Angus Reid Institute. (2024). Economic Outlook Canada Summer 2024. Retrieved from https://angusreid.org/economic-outlook-canada-summer-2024
Bank of Canada. (2023). Financial System Review. Retrieved from https://www.bankofcanada.ca/2023/05/financial-system-review-2023
Benefits Canada. (2023). Financial Wellness Survey. Retrieved from https://www.benefitscanada.com/benefits/health-wellness/47-of-canadians-equate-financial-wellness-with-lack-of-financial-stress-survey/
Financial Consumer Agency of Canada. (2019). Canadian Financial Capability Survey 2019. Retrieved from https://www.canada.ca/en/financial-consumer-agency/programs/research/canadian-financial-capability-survey-2019.html