Employers and Financial Wellness

Anyone who has experienced financial stress will tell you that it casts a cloud over your whole life. Knowing that you have an upcoming bill or a rent payment that you don’t know how you’ll cover is a scary place to be, particularly if it’s happening on a regular basis, and it affects your ability to enjoy anything else in your life. According to the Government of Canada, 48% of Canadians have lost sleep over their finances, and 44% say it would be difficult to meet their financial obligations if their pay was late. Financial stress affects Canadians at all income levels, and those who experience it are more likely to suffer from strained personal relationships and poor physical health as a result.

If any of this rings a bell to you, you may be wondering, where does one go for more help? Traditionally, people would have agreed that it should be our government stepping in to provide Canadians who need financial assistance with the support they need. However, we’re experiencing a shift in Canada: more and more people are agreeing that employers need to be stepping up to provide their employees with a greater degree of financial assistance. Particularly with the onset of COVID-19 putting a steadily increasing number of people in a financially insecure position, we’re seeing Canadians push back at the idea that employers should only be concerned about their bottom line and not so much about the people who work hard to push their organizations forward and ensure their success.

Employers are perfectly positioned to help their employees achieve financial security in a number of ways. First, they have the ability to enforce their policies and programs on a much faster basis than government is generally able to; even a very large corporation could probably introduce a new benefits program for all their employees faster than our government is able to pass a bill that would offer similar results and put it into action. Employers, in general, also don’t have to deal with the kind of ever-changing leadership experienced in government, as political differences can often derail projects that are meant to offer people financial assistance. A great example of this is the wage freeze experienced in Ontario when the Conservative Party took power in 2018. The province of Ontario was supposed to see the minimum wage rise from $11 to $14, to then $15 in 2019 under Liberal governance, but this policy was nixed under Ford, and the minimum wage never hit $15 as planned. Ultimately, this is not to say that government should not be providing financial support to Canadians who need it, but that employers are also able to provide this kind of support on a much quicker basis without the risk of political disagreements causing major setbacks.

Second, it makes sense for employers to offer their staff some form of extra financial support as a result of the positive impact it has on their bottom line. As mentioned, financial stress is powerful, and follows those who experience it into their workplace, negatively affecting their ability to do their job well. A report by PwC shows that 46% of employees feel that their personal finances are the greatest cause of stress in their lives (the largest single category of stress, ahead of their professional responsibilities, their health and personal issues). Employers ultimately pay the price for this kind of distraction on the job in the form of lost wages, absenteeism, and in some cases, accidents on the job caused by distracted workers. The same report by PwC estimates that for an organization with 10,000 employees, $3.3 million is lost each year in lost productivity, and potentially more if that organization’s team is largely made up of Millennials (as their age demographic is more likely to experience financial insecurity than older groups). Instead, if employers work to address the financial insecurity experienced by their staff, they can reduce the amount of money they forfeit due to financial stress-related incidents. Beyond just tangible monetary results, employers can also improve their employee engagement and retention rates in the process. Research shows that employees who feel respected and cared for by their employers are more likely to work hard, care about their organization’s overall goals and are more likely to remain in their role over a long period of time. By offering their staff financial wellness tools and benefits, employers can easily show their staff they value their overall wellbeing and appreciate their contributions to their organization.

Finally, frankly, employers should care about the people that work for them as a thank you for all they do for their organization as a whole. Of course, in smaller businesses, there is less of an income gap between the top-level staff members and the bottom, but there are countless businesses around the world where the staff at the executive level earn significant amounts more than those at the lowest rung on the totem pole. Irrespective of that income gap, those at the top of any organization depend on the low-wage earners, those who are actually running the retail shops, restaurants, service kiosks and whatnot to serve customers, retain them and earn the huge profits that sustain a business overall. Those employees, functioning as essential components of their organization, deserve to feel financially secure in exchange for their hard work and should feel confident that they can weather an unexpected financial storm without having to take on a huge amount of high-interest debt. If employers feel their business is doing well, then they should feel motivated to share that success with all levels of their team.

With all this in mind, you may be wondering: could my employer be doing more to support me financially? Before getting ahead of yourself, get in contact with your HR department and be sure you know about any and all benefits programs available to you through your employer. There may be an existing program available that you haven’t yet taken advantage of (in which case, figure out how to participate and get going!). If your employer isn’t offering any financial wellness tools or benefits at the moment, then it may be time to contact them directly (or your HR department) and request they start offering some. It’s important to acknowledge that there are a ton of different ways employers can offer their employees an extra degree of financial support, and you shouldn’t have to be a high-wage, salaried employee to access them. These include:

·      contribution-based retirement benefits (commonly known as an RRSP in Canada, or a 401k in the United States) - an employer matches an employees contribution towards their retirement fund to a certain annual limit

·      health benefits – employers offer their employees some level of health insurance (may be a basic package or may include extras like dental, optometry, therapy, etc.)

·      match-based saving benefits – employers offer to match a portion of what their employees save in a third-party bank account (this money can be cashed out on short notice and used for anything)

·      generous staff discounts – employers offer their employees generous staff discounts on the goods and/or services sold by the business (could be food, clothing, electronics, etc.)

·      financial wellness programs and education – employers can arrange so that financial courses and seminars are available for free to their staff, or have a financial expert regularly accessible to staff so that they can ask the expert questions and work on financial plans with them

·      grant programs – employers can offer an application-based grant program so that employees who experience an emergency financial shock they are unable to contend with can access a grant rapidly to help cover it

The list goes on and on! People are often quick to think exclusively along the line of health or retirement benefits when they think of how employers can offer financial support, but in actuality, there are a wide variety of ways employers can help target specific needs and resolve the financial problems experienced by their staff.

An amazing example of this work in practice is the work done by Red Tab Foundation. Founded in 1981, Red Tab Foundation works on behalf of Levi Strauss and Co. to provide a variety of financial wellness tools, benefits and grants to Levi’s employees around the world. Red Tab offers Levi’s employees a variety of programs, including an emergency grant program, financial education and match-based saving benefits. Red Tab has offered their match-based saving benefits program to American Levi’s employees for years, but recently expanded the program to include Canadian Levi’s employees using QUBER’s platform to facilitate it. We sat down with Jenny Calvert Rodriguez, Executive Director of Red Tab Foundation, last week to chat about what Red Tab does for Levi’s employees and why Red Tab prioritizes financial wellness for people long after they stop working for Levi’s.

Ultimately, we think it’s time for some sweeping changes when it comes to the way Canadians are able to access financial support. If you’re a working Canadian, you deserve to feel like you can survive comfortably off your earnings and live a life free of financial stress. Of course, personal responsibility is essential; the help that employers provide can only make a positive impact if you’re managing your money in a responsible manner that prioritizes your long-term financial security. However, you shouldn’t have to live an excessively minimalistic life in order to simply get by. It’s time for Canadian employers to step and fill the gap!

If you’re interested in learning more about QUBER’s match-based saving benefits program (what Red Tab is currently offering to Canadian Levi’s employees), or would like your employer to know more about it, you can find more information at www.quber.ca/employers or by emailing us directly at contactus@quber.ca.

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