The 5-second summary: Learn how to identify your financially challenged employees so you can guide them towards financial empowerment.
Not being able to pay your mortgage or credit card payments, having to cut back on groceries or, worse yet, insolvency are all daunting situations that can happen at any time, to anyone.
While every journey is different, the current cost of living and rising inflation are adding to the financial problems for Canadians. A survey conducted by Desjardins in March 2022 revealed that 1 in 5 people are experiencing financial difficulties.[ Note 1 ] Not surprisingly, it’s people in their working years (ages 31–49) and those in pre-retirement who are more likely to be experiencing difficulties meeting their financial commitments.[ Note 1 ]
Often a taboo subject, financial problems are perceived as shameful on both a personal and professional level. Almost half of Canadian workers also admit that stress related to personal finances has had an impact on their performance at work.[ Note 2 ]
How to identify financial problems
It’s therefore important to know how to identify the warning signs of these types of concerns so you can refer and provide these individuals with the best possible support. Here are some of the warning signs:
- Increased distraction, presenteeism and absenteeism
When you’re struggling to make ends meet, it’s common to have insomnia, which means mental and physical fatigue. As the Financial Consumer Agency of Canada points out, this fatigue can then affect the quality and quantity of work and result in distractions, lower motivation, or mistakes. The Agency also mentions that an increase in sick leave and repeated disabilities could also be a sign of financial turmoil.[ Note 2 ]
- Deferred retirement
The transition to retirement is stressful for those who haven’t saved enough.[ Note 1 ] These people may even delay retirement because they simply cannot afford to stop working. A phenomenon that we’re seeing more and more in the country.[ Note 3 ]
- Requests for salary advances
Lastly, a request for a salary advance is a clear sign of financial issues. As this is often a difficult process for the person requesting it, it’s important to react with a caring attitude. They may also appreciate, for example, grocery coupons, which can help with daily expenses.[ Note 1 ]
Turning discomfort into financial wellness
Breaking the taboo around money issues isn’t easy, but organizations can play a supportive role. On the front line, managers can support their staff in a proactive, non-intrusive and non-judgmental manner. This means listening to your staff, understanding them, and referring them to support services offered by the organization.
Affected employees can then be helped to improve their financial literacy using tools offered under their plan, such as webinars on savings or debt management.
They could also be encouraged to set up an emergency fund in a TFSA or consult a financial planner to develop a debt consolidation strategy.
Lastly, in general, when dealing with this type of situation in your organization, it’s always best to be people-focused and caring.
If you have any questions about adding a group TFSA to your group retirement savings program, talk to your client relationship manager.