Money problems are the No. 1 stressor of Canadian employees today. With work and personal lives closely interconnected, personal money concerns significantly affect employees and thus employers in numerous ways including: higher absenteeism, higher short-term disability claims, higher staff turnover, more accidents and mistakes, more workers’ compensation claims, and lower productivity. Clearly, there are bottom-line profit implications for businesses.

A 2007 national survey conducted by Desjardins Financial Security found 44% of employed Canadians cited “money problems” as the main source of stress, anxiety and depression.(Note: the second most common stressor was family matters, cited by 19% respondents, with the other two stressors following close behind in third and fourth place).These results confirm what many other studies have found—personal money issues weigh heavy on people.

Canadian households are spending, on average, 25% more than they earn and their average debt load has tripled in the past six years, according to the most recent Statistics Canada data. At the same time, consumer credit is at an all-time high with the average Canadian household savings at just 5% of after-tax disposable income—just half of what financial experts recommend.

With work and personal lives closely intertwined, employees don’t “check” their money worries at the workplace door. The connections between personal finances and work outcomes are very strong—some even claim it is the most glossed over and ignored worker issue today.

Wise employers know the secret to getting and keeping good employees is more than paying a competitive wage and providing a competitive benefits package. It also involves providing training/development opportunities—those which are technical, work-specific, as well as those which are personal development in nature. Research by Dr. Tahira Hira of Iowa State University showed that employees who participated in employer-sponsored financial education had more respect for their employer and better managed their money.

Other Things Employers Need To Know

1. It’s often difficult, if not impossible, to identify a financially stressed employee. For most Canadians, money is something not openly talked about. According to a Money Magazine poll in 2005, 50% consider money a sensitive issue, far more than politics or religion. As well, people care about what others think, with 30% admitting to having misrepresented their financial success to friends or family. And with many spending more than they can afford, “keeping up appearances” becomes so much a part of many peoples’ identities that 90% don’t see it in themselves(Genworth Financial Survey, 2005). Or, perhaps we don’t want to see it, as 36% go to great lengths to avoid facing up to financial reality and 17% refuse to look at bank balances or financial statements. Regardless, an employee with money problems is like the “elephant in the room” —big and looming, yet not “seen.”

2. Being intelligent and well-educated does not always prevent money problems. Intelligent, well-educated people, those with higher IQs tend to earn more but don’t always save and invest their money wisely. Of those having the highest IQs(i.e., over 125), 6% regularly max out their credit card limits while 11% miss bill payments.

3. Earning a good wage does not always prevent money problems. Earning a good wage is one thing; managing it—something which requires a whole different set of knowledge and skills—is quite another.

“To Do” List For Employers • Check your company benefits package’s coverage regarding financial programs/services. If there are none, set up a meeting with your provider to discuss including one. If you aren’t clear on the details of your existing financial services coverage, set up a meeting with your provider to discuss the specifics and make any needed changes.
• Pick one way to begin communicating your company’s financial programs/services to employees. Did you know that most employees are unaware of most of the benefits available in their employee benefits plan? • Organize a seminar(s)on money-related issues for employees. Consider inviting their partners/spouses too.
• Arrange training for human resource and/or EAP staff so they can better identify and help employees with money problems.
• Begin including money information on a regular basis in your employee communiqués(e.g., intranet, company newsletter, company bulletin board, paycheque insert).
• Contact a not-for-profit credit counselling organization in your province to find out how they can help.

Brenda White is the business development coordinator at the Credit Counselling Services of Alberta. bwhite@creditcounselling.com.

Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com