May is the perfect time of year to address employees’ financial health, as they’ve just gone through the stress of filing their tax returns. As well, May 7-13 is Mental Health Week in Canada, so employees will be seeing an abundance of resources to support their challenges, encourage new behaviours and improve their situations.
Good financial health includes many facets, such as spending and saving habits, financial literacy, discipline when budgeting and maintaining a realistic perspective of current and future circumstances. When employees address all of those components, they’ll feel a greater sense of financial health and a reduction in stress, anxiety and even depression.
However, many employees will feel their finances are a more private topic than their physical health goals or even mental-health concerns, so they may not be eager to respond to a workplace survey. A simple solution is to offer a menu of educational options for employees based on their biggest areas of concern and provide a range of resources they can take advantage of independently.
Depending on the benefits and pension options provided to employees, some of those resources may come from an employer’s record keeper at low or no cost. Encouraging employees to access and use these supports will help them engage in the process of achieving better financial health and will have benefits for both workers and employers.
Financial stress is unique from other forms of difficulties caused by personal relationships, work conflict or external influences. Finances are a lifelong responsibility that don’t always offer instant or even short-term gratification, so it can often feel like living with a chronic condition that requires daily management and behavioural modification to improve quality of life. As seen in patients with chronic illnesses, people are more vulnerable to developing more than one coexisting condition. For example, a person who’s experiencing high levels of financial stress is more likely to suffer from severe anxiety, depression or high blood pressure. They may also be neglecting their physical health, which could result in diabetes or high cholesterol.
Treating financial health like a chronic condition in the workplace means a focus on modifying behaviour. Employees first need to create their foundation data set, including income, regular and potential expenses, savings, investments and impending major commitments like putting a child through post-secondary education or becoming a primary caregiver.
Once they’ve set the benchmark data, the next step is evaluating behaviours. For example, spending versus saving will be a major one. If spending exceeds saving (as it does for a large proportion of Canadians), the employee will have to stipulate priorities and commit to them. From then on, employees will need to educate themselves using the tools provided and make the necessary changes to their own behaviour. Employers can consider offering regular opportunities to update their progress with a financial planner or, depending on the benefits and pension offering, there may be access to professional assistance through the record keeper.
Providing education and support will offer employees all of the tools they need to adjust their current behaviour and remove their finances from their worry list. I think we can all agree those lists have grown too long as it is.