As Canadians face the dual effects of the rapidly rising cost of living and interest rates, the resulting financial stress has major implications for plan sponsors, said Valérie Fernandez, senior advisor of workplace health best practices and strategic support for group insurance at Beneva, during Benefits Canada‘s 2023 Healthy Outcomes Conference in October.
Indeed, employers experience a financial hit from employees’ financial stress, she said, referring to a 2019 study by the Financial Consumer Agency of Canada that found financial stress results in 3.5 hours per week (or 7,521 hours per year) lost to distraction, translating to an annual cost of more than $1,000 per employee in lost productivity.
Read: Survey finds employees’ financial stress costing employers $40BN in 2022
At the employee level, there are both physical and mental health impacts of financial stress, said Fernandez, noting workers dealing with financial strain are two-times more likely to report poor overall health and four-times more likely to experience insomnia, headaches and other illnesses.
“We want to be able to create a safety net for employees and to be able to offer the support they need when they need it. People are the organization’s most valuable asset and we want to help them through those difficult stages that many go through in their lives.”
Financial health should be a “shared responsibility” between individuals and employers, she added, suggesting employers provide financial education programs and access to advice from financial planners to help employees better understand and manage their financial situations.
Fernandez also recommended employers promote their employee assistance programs, which tend to include some financial counselling. These programs can speak to the different financial needs of each generation in the workforce, she noted, such as paying off student loans, preparing to make a first home purchase or saving for retirement.
Read: EAPs increasing virtual delivery, taking proactive approach to meet employees’ shifting needs
It’s also important that employers make sure employees know what’s included in their benefits, such as any flexible spending accounts that might cover expenses such as childcare or eldercare costs or any programs like a compassionate loan program.
Sharing an example of a hypothetical employee who just learned she’s pregnant with her fourth child, Fernandez said employer support could involve promoting financial education resources, as well as making sure the employee understands her employer’s maternity leave top-up plan and helping her through the process of getting employment insurance maternity leave benefits.
Read more coverage of the 2023 Healthy Outcomes Conference.