Financial worries eat up work time

by | Sep 7, 2023 | Take 5 Articles

When it comes to their finances, Canadians are stressed. A survey by Manulife and Angus Reid in late 2022 found that almost three out of four Canadian workers are concerned about their level of financial stress.

“Finances are top of mind for most Canadians,” says Brenda Mullen, Senior Consultant, Employee Retirement Plans at Belay Advisory, Calgary, a member firm of Benefits Alliance.

“Inflation, the cost of living, gas prices and the cost of electricity—these are the things that hit the bottom lines of Canadians at the moment.”

While financial literacy can improve the level of financial stress, only one in five Canadians say they are financially literate. Half report they are “somewhat literate”, according to a 2022 survey from Maru Public Opinion. That means many are in the dark about budgeting, saving or investing.

The fallout for employers is employees who are not as productive as they could be. “Work is where people spend most of their time,” says Mullen. “If they’re worried about their finances, they’re going to be distracted from their job.”

Indeed, four out of five employees worry about their finances at work and spend 2.4 work hours on personal finances each month on average, reports the Manulife survey. And half of those worried about their finances say they’d be more productive if they weren’t so stressed.

As well, employers may find themselves with a workforce that’s looking for better-paying jobs elsewhere, adds Doug Belford, Director, Wealth Strategy and co-founder at Seedwell, a provider of financial wellness benefits that incorporates artificial intelligence (AI) into its platform. Plus, there may be more benefits costs due to financial stress, such as sick leaves, mental health services and prescriptions for anti-anxiety medications.

Mullen has noticed that more employers “are getting the message” and disseminating financial information to their plan members, including online resources for financial planning. Yet she feels that advisors can do more to remove barriers and nudge plan sponsors to go further to encourage their employees to access resources, attend workshops and improve their financial literacy.

A helping hand

Easy access and fluid navigation are essential for engagement, says Belford. “It’s kind of like the jump from being good at reading maps to having GPS,” he says.

To get to that place, employers often need a helping hand. A good start is to enlist the help of their benefits advisor to develop a strategy and roll out programs such as lunch-and-learns, webinars and special events that promote financial literacy, advises Mullen.

The benefits advisor can also vet and bring in one of a growing number of technology-driven service providers to “help accelerate and complement” existing plans and programs, says Belford. Artificial intelligence plays a role by embedding various prompts to drive plan members to key pieces of financial information and to encourage them to make decisions and use financial tools—such as an automated savings plan—to their fullest.

Employers that commit to promoting financial literacy help prevent employees from getting financial information from potentially unreliable sources on the internet. The curation of information and resources, including but not limited to those available from the plan sponsor’s insurance carrier, conveys objectivity and builds trust. “It’s important people have expert, unbiased information,” says Belford.

The payoff for employers is employees who feel in control of their money—and much less likely to bring their financial worries to the workplace, says Belford. “The goal is to help ensure that all employees, regardless of income level, have solutions tailored to them to reduce their financial stress.”