Offering Employees Clear Information to Strengthen their Financial Literacy Pays Off

“If you can’t explain it simply, you don’t understand it well enough.” – Albert Einstein

Have you noticed people are often distracted at your work? It could be because of financial stress. Maybe they have too much debt and aren’t saving enough. Or maybe their finances are too complicated. Maybe they don’t know where to start.

In fact, 42 percent of Canadians named money as the source of their greatest stress, according to a Financial Planning Standards Council survey. It found people ranked money concerns over work, health, and relationship issues as the leading cause of sleep loss, anxiety and, in some cases, severe stress.

Here’s something all companies can do to make a big difference: Help staff improve their financial literacy.

Knowledge is empowering, and so is confidence. Strengthening the financial literacy of employees can help them be more confident with their personal finances, allowing them to be more engaged and focused on their job. It can also help reduce absenteeism and improve staff retention.

All of us know what a big impact stress can have on mental and physical health. Giving people the knowledge, skills, and confidence to manage their personal finances, and reduce that stress, has many benefits for Canadians and their families.

Financial literacy has always been important and it’s even more so given the current financial services environment and changing demographics. Financial services and products are increasingly complex at a time when we have an aging population. The onus has shifted to individuals to manage a lot of their finances, including retirement.

At the same time, people are making decisions more quickly than ever before because of digital technology and smart phones. This is particularly true for Millennials, who are now the biggest generation in the workplace.

Employers can simplify things by providing information that helps people make informed choices. Using clear language to communicate and pointing people to easy-to-use tools and resources can help make things less overwhelming.

Even doing one simple thing can make a difference: Encourage staff to make a budget. The majority of Canadians don’t have a basic household budget but it’s a proven tool that can help people save, and manage their money and debt.

It’s important that people understand what money they have coming in and going out so they can plan their finances. Many Canadians have high levels of household debt and low savings and, at 167 percent, Canadians’ debt-to-disposable income has hit an historic peak.

To empower Canadians to strengthen their financial literacy, the Financial Consumer Agency of Canada (FCAC), a government agency, has set three priorities. First, FCAC wants to see more Canadians develop a budget. Second, it wants Canadians to build savings, including emergency funds and long term savings. Third, it wants Canadians to understand and learn about their rights and responsibilities as financial consumers. To meet these priorities, FCAC aims to reach large numbers of the adult population with programs and information in the workplace.

In February, FCAC announced a new National Steering Committee on Financial Literacy. Frank Swedlove, President of the Canadian Life and Health Insurance Association (CLHIA), was among the 15 experts appointed to the committee, which supports FCAC in implementing the National Strategy for Financial Literacy – Count Me In, Canada! The committee, chaired by Jane Rooney, Canada’s Financial Literacy Leader, will focus on enhancing financial literacy in workplaces across the country.

A number of insurance companies are already leaders in this area. As well, CLHIA has supported initiatives across the country, including the development of its own tool to help people plan for their retirement, and has helped promote FCAC’s efforts.

FCAC has many online resources to help companies get started. It has resources for workplace programs and tools your employees can use to build on their financial knowledge, skills and confidence.

Here’s what you can do: · Go to Canada.ca/It-Pays-To-Know to access FCAC’s programs, tools and resources and encourage your staff to: - Use the free financial tools and calculators. - Find information on managing money, debt and borrowing, or savings and investments. - Try the online learning program “Your Financial Toolkit,” or money management workshop “Financial Basics.” - View our YouTube videos and follow us on Facebook and Twitter. - Access information on how to guard against fraud and scams. · Encourage employees to make a budget. Offer a budget worksheet or point people to FCAC’s Budget Calculator. · Add money management tips to pay stubs or pension and benefit information. · Integrate financial literacy into human resources and employee assistance programs. · Organize financial literacy workshops to help educate your workforce. Find training options and materials in FCAC’s Canadian Financial Literacy Database, or contact organizations already offering programs in the workplace (Sun Life Financial, Great-West Life, and Chartered Professional Accountants Canada).

Financial literacy pays off. It helps Canadians and their families, and can benefit any business. FCAC wants to hear from companies about financial education in the workplace. Fill in a short survey online under Workplace Financial Literacy at Canada.ca/It-Pays-To-Know.