While the phrase “physical and mental wellness in the workplace” are often thrown about a lot, financial wellness is seldom talked about as much. And in a bid to offset physical and mental stress, more companies are buying into the idea of offering employee perks, such as office fitness centres and massage therapists, office eateries with nutritious foods, onsite healthcare services and counselling, and community bikes, among others.
Nevertheless, often overlooked, financial worries are the number one source of stress in offices across Canada and the world over, more so than any other concern.
Financial Stress in Canada
With the high cost of living in Canada, life can be a fierce struggle for workers on the lower end of the income scale. Plus, most Canadian employees are trapped under the crushing weight of never-ending debt such as home loans and student debt. Add in the fact that in the wake of the Covid-19 pandemic, it has been all doom and gloom financially for the workforce and business owners.
As a result, most income-constrained workers that live paycheque to paycheque have been subjected to relentless stress over their finances. Consequently, the financial stress preoccupies the employees’ minds, hurts their work commitment, and lowers their performance level and productivity. Therefore, it is difficult for the employees’ unique talents to shine through.
And if a 2021 survey by the Canadian Payroll Association is anything to go by, then 38% of interviewees cited money issues as their number one stressor in life. Only 26% identified personal health as their primary employment concern, with 20% mentioning work and 15% blaming their work woes on relationship issues.
Financial Stress in Canada is more of an Employee Perception
There is much more to financial wellness than dollars and cents. Although every employee desires a livable wage, they will also seek solutions to proper housing, food, healthcare, childcare, transportation, and financial security.
Remember, the costs of living in Canada differ. And the financial concerns vary from generation to generation and from one social-economic cohort to another. So, for example, while millennials are more concerned about repaying student debt and buying a car, older generations will think about starting and raising a family, paying mortgages and bigger debts obligations, and retirement. Also, if you live life in the fast lane, you are more likely to get stressed out about your finances.
Nevertheless, arguably all employees in Canada seek to be financially healthy in the following ways:
- Make substantially more than they could reasonably spend.
- Control over day-to-day personal finances
- Capacity to absorb financial shock / have financial security
- Meet financial and saving goals
- Achieve the financial freedom to make free choices that allow them to enjoy life
Causes of Financial Stress
Many challenges may forbid the workforce from being financially free and delivering on its promises. Next are the main financial stressors in Canada:
Most working Canadians can hardly get by. A large chunk of workers struggles to keep up with the rising cost of living while their income remains the same. Not to forget that business has been down due to the lockdowns and movement restrictions, and many brick-and-mortar enterprises that provided additional income have been struggling to stay afloat since the pandemic. Hence, most people have lost or decreased their income with the advent of the Corona Pandemic. As a result, the average income can barely meet the living costs. Hence, a big proportion of the Canadian workforce has been exposed to financial stress.
Poor Financial Habits
Many a time, not having enough money for yourself is more of a mathematical problem. In an era where people want to judge you on how affluent you appear, the temptation to spend 150% of what you earn and live a high-end lifestyle is irresistible. Most people are unfamiliar with healthy financial management practices like saving, budgeting, and conscious spending. Poor money behaviors like over-borrowing, impulse buying, and spending beyond ones’ means are a sure recipe for financial stress.
It is difficult for employees always to be ready with finances for unforeseen challenges and expenses that may arise, often with little or no warning. Our own studies showed that only 23% of Canadians were prepared for financial emergencies in 2021. Such unexpected contingencies that may come the employees’ way include divorce, medical expenses, accidents, and damages caused by natural phenomena. Such unexpected eventualities will have detrimental effects on the workers’ budget and lead to financial stress.
Most young people will read and get fascinated by the story of young millionaires like Mark Zuckerberg, who got lucky with investment and cashed out in their 20s before retiring young. However, trying to emulate such figures may lead to unnecessary pressure on yourself and bring about financial stress.
Effects of Financial Stress in the Workplace
Left unchecked, financial stress will hamper the workforce’s return on investment (ROI) and the value it brings in the following ways:
A worker in a financial crisis will spend hours of their workday thinking about their financial worries. This limits employees’ ability to focus and finish daily tasks. Not just that. Financial stress among the staff increases worker turnover, absenteeism, and tardiness. And according to recent studies by mymarble.ca, financially stressed workers will lose out on nearly one month of productive workdays every year.
The outcome is lower work quality, reduced workplace efficiency, and plummeting productivity levels. Even more, employee happiness reduces and affects the customer relationship and company reputation overall.
Increased Costs of Operation
Another result of financial woes among employees is increased costs due to low worker retention brought about by resignations and job deserters. Rehiring means increased HR workload and additional hiring and training costs. More than that, employees in financial crises are more likely to delay retirement. Lengthening employee working life increases wages and health insurance costs.
Weakened Workplace Culture
Financial stress leads to poor peer relationships among employees. Workers experiencing financial stress are likely to shut themselves away from the rest of the staff. This self-isolation could result in a weaker, less loyal team and kill the team’s productivity.
Depression, Anxiety, and Panic Attacks
Effects of chronic financial stress may extend to psychological wellbeing. For example, employees suffering frustrations due to finances often perceive uncertainty as a potential risk or cause of harm. As a result, they develop anxiety, fear, worry, and unease. So, the inability to cope with severe financial stress may pose a myriad of behavioural and mental issues like depression, anxiety, and panic attacks. Also, these very burdened workers are more susceptible to emotional and social problems such as divorce and physical illnesses.
Stress and sleepless nights are inextricably bound. Concerns about finances can keep you up all night thinking about possible fixes. Workers copping with complex financial situations are likely to experience temporary insomnia and sleep disorders. And too little sleep can take a severe toll on the concentration, cognitive functioning, planning, good thinking, and problem-solving abilities of a worker. That’s not all. Lack of sleep promotes workplace burnout, undermines workplace productivity, and may lead to anxiety disorders and depression.
Worsened Financial Attitudes and Habits
Here’s an inescapable fact: most people will react to a high level of financial stress by making more financial mistakes and less efficient choices. Here are poor financial practices that usually define workers with chronic money problems:
- They will hardly save.
- Never plan their spending is more likely to make impulsive purchases.
- They do not feel in control of their finances.
- Are less convinced that success comes after hard work.
Employers Can Do Something To Help
In mitigating the setbacks of financial stress in the workplace, no step is more critical than helping employees to manage their finances effectively. To achieve this noble goal, you must lay down a financial coaching support and wellness program and promote it through the company. Next are some of the different ways of overcoming financial stress in the office:
The single-most prevalent cause of financial stress in Canada is a lack of financial literacy. To prevent financial crises — especially among the younger worker — regularly educate your workforce on financial responsibility, discipline, and careful planning. Focus on the importance of living below their, prioritizing necessities only, cutting back on luxuries, and investing the excess. Tailor the learning specifically to suit your employees’ needs. Compel the workers to uphold sound financial behavior and adopt intelligent debt management habits.
Digital Financial Management Tools
Encourage employees to enlist the aid of digital financial management tools and digital financial advice and planning. Examples of these digital money tools include budgeting apps, credit report software, QuickBooks, and other personal finance programs. Reliable online platforms like mymarble.ca offer valuable tips on how to overcome financial stress.
Listen to employee priorities and propose employee benefits products and services such as accrued wage advances, low-interest loans, employee discounts, and debt consolidation/repayment programs. These employee benefits will help employees that are weighed down by financial burdens navigate their woes.
Prompt and Consistent Pay
Paying employees on time means settling their bills without delay and saving them from accrued debts. Furthermore, consider offering more regular compensation intervals such as week payroll to improve the cash flow on the employees’ front.
The secret to doing away with financial stress in the workplace is cultivating healthy financial management habits. Of course, nothing can solve all of one’s money problems, but here at Marble, we’re here to help guide you make the right moves financial moves, and provide helpful tools that raise financial awareness and can save your workforce many hours of financial stress, pain and frustrations. As a result, productivity in the office gets a boost, and growth naturally occurs within your workforce.