'It's convenient to frame employee financial health as an individual problem, but it has big implications on businesses'
For the second year in a row, Canadian employers are losing billions of dollars due to workers’ financial stress.
Employers are expected to lose more than $40 billion due to workers dealing with personal financial matters at work, up from the $26.9 billion they lost in 2021, finds the National Payroll Institute.
"On average, a financially stressed worker spends nearly 30 minutes every day dealing with their financial situation — and not on business tasks at hand," explains Peter Tzanetakis, president of the institute.
"Over the year, that's over three weeks of lost productivity per employee.”
Read more: High inflation sees more Canadians living paycheque to paycheque
Impact on performance
Overall, 36 per cent of Canadians are comfortable financially, down from 46 per cent in 2021.
Almost three-quarters (72 per cent) of working Canadians spend at least some of their workday actively dealing with or thinking about their personal financial matters, up from 68 per cent in 2021.
And one in five (20 per cent) are aware that stress related to their finances had directly impacted their workplace performance. This number jumps to 46 per cent within the “stressed” cluster, up from 39 per cent last year, finds the survey of 3,033 working Canadians in June and July 2022.
Also, those in the “comfortable” cluster spend nearly eight minutes per day thinking about their finances on the job, significantly less compared with the more than 29 minutes per day of those in the stressed cluster.
Read more: Record number of workers spending more than they earn
A record number of Canadians say their personal finances are worse off today compared to a year ago, according to the Bloomberg Nanos Canadian Confidence Index (BNCCI), a weekly measurement of the economic mood of Canadians on the strength of the economy, job security, real estate in their neighbourhood, and their personal financial situation.
This is a cause for concern for employers.
"It's convenient to frame employee financial health as an individual problem, but the reality is that it has big implications on businesses," says Tzanetakis.
Aside from lost productivity and increased absenteeism, financial stress also leads to increased absenteeism, decreased employee motivation, strained relationships with colleagues and turnover, he says.
"If the financial well-being of working Canadians continues to deteriorate as it has in 2022, businesses should expect that the impact of the distraction subtraction will further impede productivity," says Matt Davison, dean of Science at Western University and director of the Financial Wellness Lab of Canada.
"With ongoing labour shortages, it's imperative for a business to ensure that the employees they already have on payroll are focused and engaged."
Read more: Rising inflation forces many Canadians to delay retirement
Here are some ways employers can help workers deal with the rising cost of living, according to Randstad UK:
- Provide a discount scheme for workers.
- Provide an employee assistance program (EAP).
- Offer a one-off cost-of-living bonus.
- Encourage employees to continue saving money from their salary.
- Remind employees of their pensions.
- Create a welcoming and understanding environment where there's no stigma around financial struggles.