With November marking Canada’s financial literacy month, now is a great time for employers to address the need for financial education in the workplace, says Jane Rooney, financial literacy leader at the Financial Consumer Agency of Canada.
“The workplace is an important avenue to reach Canadians because it’s like the school system for children,” says Rooney. “You’re reaching a whole cohort of workers with the key information at the right time.”
Financial stress, according to Rooney, is the number one source of stress for Canadians and inevitably impacts how employees perform at work. What leads to most of that stress is people failing to plan for their financial future, she says.
According to a survey published last October, Canadians feel financially unprepared for unforeseen life events, with 61 per cent of respondents experiencing financial stress when they or a family member suffers from a serious illness, 43 per cent when a partner passes away and 46 per cent during a divorce.
Rooney notes that through financial education employers can not only support employees by alleviating some of that financial stress but also benefit the workplace itself. “People who are stressed are less productive and they’re absent more,” she says. “We know from research that people want to get information from their employers.”
Indeed, a recent global report by Xerox HR Services found an increasing demand for financial literacy among employees. Of the employers surveyed, 92 per cent said they offer retirement financial security and preparedness programs while 91 per cent offer financial literacy and skills programs. These latter programs are the fastest growing, with 24 per cent of respondents having them in place for just one year or less and another 39 per cent for just the past two to five years.
Rooney says employers can deliver financial education to their employees in several ways, including sharing information and online tools that are publicly available through the Chartered Professional Accountants of Canada and the Financial Consumer Agency of Canada. The agency provides worksheets, videos and modules that can be shared through employee websites, she notes, adding that employees can learn the information on their own or through a class setting.
In addition, organizations can invite financial experts through their employee assistance programs or through organizations that provide volunteers to speak about the topic, says Rooney.
It’s also important for employers to highlight financial benefits that are often underused, she says, such as matching retirement savings programs. “What we know is that millions of dollars are being left on the table every year because people are not thinking of their future and not taking advantage of those matched savings program.
“We have a society where people who are 65 today can expect to live to at least 86 and the age keeps moving up,” says Rooney. “So millennials are actually likely to live to 100. People need to think about their lifestyle and plan for their financial future because compound interest is magic and investments grow exponentially over time.”