How financial wellness programs help employees and employers
Financial wellness programs can reduce financial stress, increase productivity, and strengthen talent acquisition and retention. The effects are even stronger among those who use the program. However, only half of those surveyed for Manulife’s third annual stress, finances, and well-being survey say their employer offers a program, and one in four aren’t sure. Let’s dig into why you should offer a financial wellness program and how to maximize its potential for your benefit and for your employees.
Financial stress has increased
According to our latest survey, just one in five workers feel their financial situation is very good or excellent and almost three in ten are very worried about having financial difficulties in 2023.
Almost three-quarters of Canadian workers are concerned about their level of financial stress. Many Canadians are feeling squeezed by higher interest rates on mortgages and credit cards and more expensive groceries, household basics, and gas. Survey results show that 32% of Canadian workers are strongly concerned about their finances adding stress to their life. Financial comfort gained during the pandemic has declined in the past year.
Debt is a source of stress
Canadians who feel their debt is a major problem are the most worried about having financial difficulties in 2023. And credit card debt is the biggest personal finance issue for those who worry a great deal.
Data from Statistics Canada shows that household credit card debt is up—even surpassing pre-COVID-19 levels. This might be because people are using credit cards to cover day-to-day expenses, or because interest rates are up, Canadians may be paying more to borrow that money.
As an employer, you can help your employees manage their debt by providing a range of support, including online budgeting tools, financial wellness webinars, and access to personal advice. Managing personal debt can help reduce financial stress and help employees to focus on work in the workplace.
The effect of financial stress on work
It can be tough to leave financial issues at home. This means stress becomes not only a personal issue but a business issue that could have real costs for your company in terms of productivity and absenteeism:
- 81% of workers say they worry about finances at work at least sometimes
- 52% of workers claim they’d be more productive if they didn’t worry about their personal finances at work
- 1 in 10 have missed work due to financial stress
The good news is that our findings show that those whose employer offers a financial wellness program are more likely to be in a good financial situation than those whose employer doesn't. Workers also say that if their employer offered financial wellness programs, it could help reduce their financial stress and increase their job productivity, they’d be more likely to stay at their job and, more importantly, recommend their employer as a great place to work.
Why financial wellness programs matter
Our survey found that 81% of Canadian workers feel it’s important for employers to offer financial wellness resources. And the data shows that those who are stressed about finances in the coming year are even more likely to want help from their employer than those that aren’t.
A financial wellness program could include personal advice from a financial advisor, webinars, emails, newsletters, and online tools covering topics like budgeting, debt reduction, setting financial goals, and planning for different life stages.
Financial wellness programs can also have a positive effect on retirement savings.
Those whose employer offers a financial wellness program are:
- More likely to be ahead of schedule in terms of retirement savings
- More likely to say they'll be able to retire when planned
- Less likely to say they’ll retire later than planned
But even the most comprehensive financial wellness program will only help those who know about and take advantage of it.
Only half say their employer offers a program, and one in four aren’t sure, showing an opportunity to better promote existing programs.
Make sure your employees know what programs are available to them. An occasional email isn’t enough to build awareness or encourage action. Make sure you’re sending frequent personalized communications.
Financially healthy employees can help make your organization stronger
An important driver of financial well-being for workers is having access to workplace financial wellness resources, including professional financial advice. Not only does it benefit your employees, but it may also help you with talent acquisition and retention.
Consider offering or enhancing a financial wellness program that is easy, guided, and personal to help support a more financially fit and productive workforce.
Important disclosures
All data is from the 2022 Manulife Retirement stress, finances, and well-being survey. This year’s survey was conducted with 1,551 Canadians using Angus Reid’s research panel. The survey was conducted in English and French from November 28, 2022, to December 8, 2022, with an average survey length of approximately 17 minutes per respondent. Survey respondents were age 18 and up, were employed, and contribute to an employer-sponsored retirement plan. The maximum margin of sampling error at the 95% confidence level is ± 2.3%. The 2022 stress, finances, and well-being survey was commissioned by Manulife and John Hancock Retirement and conducted by Edelman DXI. Manulife is not affiliated with Edelman DXI, and neither is responsible for the liabilities of the other. The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.
