Memo to employers: Living paycheque to paycheque takes a toll
Employees' personal finances may be none of the company's business, but don't underestimate the impact on the workplace
Sep 14, 2010
By Todd Humber (email@example.com)
A majority of Canadians are hanging on to the edge of a financial cliff by their fingers.
Nearly six out of 10 workers (59 per cent) would be in financial difficulty if their paycheque was delayed by a week, according to a national survey of 2,766 employees conducted by the Canadian Payroll Association.
That should raise plenty of red flags for employers.
How individual employees manage their personal finances is, of course, none of the company’s business. But the side effects of living paycheque to paycheque can have significant ramifications in the workplace in terms of morale, stress and distraction.
So what’s an employer to do?
“Raise wages!” That would be the chorus coming from employees. And, ideally, yes. More money wouldn’t hurt. But let’s be realistic — that’s not going to happen. While salary freezes are certainly thawing for 2011, according to most compensation surveys, employers aren’t in a position to throw fistfuls of cash at workers. And, frankly, that may only treat the symptoms and not the causes for a population addicted to credit and living beyond their means, regardless of how high those means might go.
A more prudent strategy for employers is making financial counseling available for free to all employees. If an organization has an employee assistance program (EAP) in place, then it should bring that to the attention of employees. And employers need to underscore the fact that it’s a free, completely confidential resource for employees to turn to.
If an EAP isn’t in place, consider putting one in — they don’t cost that much, and provide a wide range of services to help employees.
If the organization has no interest in an EAP, then it could look at hiring a financial consultant to conduct lunch-and-learns or perhaps private one-on-one sessions with workers, with the employer footing the bill.
With so many workers facing financial difficulty, and the extreme toll worrying about finances takes, it’s a problem employers cannot afford to ignore. Organizations know the value of an engaged workforce. If 60 per cent of the population is going to work stressed about their personal finances, it’s going to have an impact on the bottom line.
Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resources management. For more information, visit www.hrreporter.com.
Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber