With many Canadians dealing with financial stress, employers are uniquely positioned to help, but their financial wellness programs must go beyond just literacy.
“[Everyone] has heard the term financial literacy, but as we know, it’s not enough,” said Saijal Patel, founder and chief executive officer of Saij Wealth Consulting Inc., during a Canadian Pension and Benefits Institute webinar earlier this week. “The term financial capability is more encompassing — it’s not just literacy, it’s helping build confidence. It’s skills, it’s engagement with the financial industry, because [these are] key to being financially well.”
Nearly half (47 per cent) of Canadians said they’re living paycheque to paycheque and 35 per cent said they’re overwhelmed with their current debt level, according to a recent survey by the Canadian Payroll Association. But the survey was conducted prior to the coronavirus pandemic, which has wreaked havoc on people’s financial wellbeing, noted Patel.
“We know that when we went into a lockdown in March, we . . . heard stories of numerous people who couldn’t meet their rent and they were seriously struggling. We know that this is an issue,” she said, highlighting a more recent survey that found two-thirds of Canadians said job loss or reduced income would, or already has, caused them severe financial stress.
While employers may still be paying their employees at this time, Patel said their partners or family members may be in a different boat. “We sometimes look at financial wellness from an individual perspective, but it’s really a household perspective.”
Because of the pandemic, employees’ financial health is now likely one of their greatest concerns. And employers have a vital role to play in helping them feel financially well and capable. “Financial wellness for employees . . . is becoming more important. And certainly in light of the COVID-19 pandemic and what could be the aftermath, I truly believe this is going to be a topic that will be more top of mind.”
To build a successful financial wellness program, Patel suggested that employers take a holistic approach rather than just hosting one-time events or posting information on the company intranet. The first step is to get a clear understanding of what employees need by sending out an anonymous survey that assesses their financial confidence and skills and determines their money stress points. The survey could also ask for age, gender and salary ranges. “You want to get a sense of what topics they would like to hear and the delivery format [that] would help them as well.”
For employers noticing low enrolment in their retirement savings plan, this may be an indication that employees are struggling with other money issues, she said. “For companies that offer pension plans, . . . that doesn’t help a lot of people who are in debt. Especially your younger workforce is not going to be thinking [about retirement], even though they probably should. So you have to make sure that you’re offering the other [supports] as well.”
The content itself has to be easy to digest, free of jargon and have clear relevance to employee concerns, said Patel, adding it should also be timely and connected to “trigger points” throughout the year, such as using registered retirement savings plan season to remind employees of the importance of making contributions.
Because money and financial wellness are sensitive topics with attached shame and stigma, she noted that having various delivery channels — from town halls to digital content and webinars — will be key to helping most people. “Some people just want to learn certain things on their own and [don’t want] to engage. If you hold an in-person event saying, ‘Hey, we’re going to help you [deal with] your debt,’ a lot of employees are not going to show up to that. . . . It’s like admitting they have a debt problem.”
It’s also key to ensure any resources are free of product sales or biases so that employees trust what they’re learning, she added.