Even though financial stress and mental health are two separate employee challenges, there is a significant link between them. Financial stress can directly affect an employee’s mental health and can eventually affect their job performance. In a competitive world where businesses are focussed on reducing overhead costs to maximize profits, what can employers do to better support their employees’ financial wellness?
The pandemic's financial crisis
In the year since the first pandemic shutdown began, millions of Canadians have lost income or lost their jobs entirely, and even those who have found new jobs or resumed their old positions may still be struggling. Likewise, though governments at every level offered financial support of various kinds, many of these programs have ended, and people might not qualify for the new benefits. As provinces continue to move in and out of lockdown measures, millions of Canadians feel anxious about their financial circumstances.
Of course, employers themselves have struggled with challenges in the workplace arising from the pandemic. A significant number of businesses have had to close permanently due to financial burdens. Lockdowns, though necessary to protect public health, have changed spending habits. Despite the availability of government assistance for commercial rent, payroll subsidies, and other supports, many businesses have seen precipitous downturns in revenue, even as costs have gone up to acquire essential health and safety equipment. The recovery seems to be finally on track, but we’ve all seen how quickly the situation can change.
Impact of financial stress on mental health
According to the Financial Consumer Agency of Canada, employees dealing with financial stress are twice as likely to report overall poor health and four times as likely to suffer from sleep problems, headaches, and other illnesses.
The most common sources of financial stress for employees are:
- Managing household expenditure;
- High levels of debt;
- Living paycheque to paycheque; and
- Difficulty saving money.
Even in this era of side gigs, hustle culture, and monetized hobbies, most people still make most of their income from conventional employment. That means employers still have enormous influence over financial circumstances. Housing costs across most of the country are rising extremely quickly, and debt-to-income ratios are high, both of which are correlated with anxiety about the future. Coupled with these increased costs, real wages have been largely stagnant for decades, even as unemployment has fallen to record lows and the economy has boomed.
When facing widespread and systemic issues like these, individual action often isn’t enough. Employers need to step in and explore all available options to boost employees’ overall wellness. It is essential to have in place a strategy to manage mental health in the workplace. Some of these trends have seen sharp changes due to the pandemic, but the long-term pattern is likely to re-assert itself.
Guide to employee mental and financial wellness
A survey conducted by Manulife found out that 40% of Canadians say they are "financially unwell" and are more likely to experience stress. It is about time that businesses realize that finances, just like mental and physical health, are key elements that translate into overall wellness. And that is why the financial aspect needs to be accounted for when creating a holistic wellness strategy.
However, with so many competing forces, it can be hard to see a way forward. The question is, What can businesses do? Looking at this from the employer’s perspective, we understand the challenges in their role to help improve employees’ financial wellness, so our team of experienced HR professionals has outlined an action plan that includes some efficient options to help employees. Download our FREE Guide to Employee Mental and Financial Wellness now to get valuable insights.
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