As HR professionals and business owners, you understand the importance of supporting your employees' financial well-being. Employees who are financially are more likely to be mentally well, productive, and less stressed overall. In this article, we outline why financial literacy matters and provide some recommendations for free resources you can promote.
As HR professionals and business owners, you understand the importance of supporting your employees' financial well-being. Employees who are financially are more likely to be mentally well, productive, and less stressed overall.
With RRSP season upon us, your employees are about to be bombarded with communications regarding deadlines to contribute and the importance of saving for retirement. This is the perfect time to highlight the value of financial literacy and potentially introduce a group savings plan.
Why Financial Literacy Matters
Financial literacy is crucial for both employees and employers. Here’s why it should be a priority:
Empowerment: Financially literate employees are more confident in making informed decisions about their money.
Reduced Stress: Understanding financial concepts can reduce anxiety related to money management and retirement planning. According to a study by the Financial Consumer Agency of Canada, 48% of Canadians say they’ve lost sleep because of financial worries.
Mental Health: Financial stress is a significant contributor to mental health issues. The Canadian Payroll Association reports that 43% of employees are so financially stressed that it impacts their performance at work.
Increased Productivity: Employees who are less stressed about their finances are more focused and productive at work. The Society for Human Resource Management (SHRM) found that employees dealing with financial stress are 5 times more likely to be distracted at work.
Retention and Loyalty: Employees who feel supported in their financial wellness are more likely to stay with the company and be loyal.
The RRSP season rush is an opportunity for you to raise awareness around the importance of financial literacy and steps your team can take to be empowered. Reducing barriers to improving financial literacy is a great way to get started.
Promote free resources
Instead of invoking the sense of urgency and stress invoked by RRSP deadline reminders, you can promote free resources that can improve financial literacy.
The Association of Canadian Pension Management (ACPM) offers a free course for all Canadians on retirement savings. The course can be completed at any time and any pace. It includes 6 modules containing 52 lessons, including.
Importance of Savings
Individual Registered Savings Plans
Government Retirement Income
Workplace Retirement Savings Plans
Transition to Retirement.
Decumulation
Many Employee and Family Assistance Programs (EAPs) also offer financial coaching our resources to plan members. We recommend promoting the resources and coaching that may be available at no cost within your program.
No Budget for a Matched Savings Program? No Problem.
If you don’t currently offer a group savings plan with matched savings, you can still offer a voluntary plan to your team members. That means that employees would be able to sign up to have money taken off their regular paycheques.
As an employer, you would be managing the payroll deductions for team members who chose to sign up. This has been made quite simple by modern providers who offer platforms with no minimum cash-flow requirements, paperless enrolment and ongoing management, and robust employee dashboards.
Plan members would benefit by taking advantage of dollar-cost averaging, less stress during RRSP season as they struggle to “find money” to take advantage of RRSP deductions for tax purposes, and the knowledge that their employer is doing what they can to support the financial wellbeing of their team.
Setting up a Matched Savings Program
If you do have a budget to start a matched savings plan, we’d love to hear from you. The process of setting up a plan is as simple as determining a budget, taking a look at benchmarking data, designing a competitive plan tailored to your HR strategy, and communicating with your team.
Book a meeting with us today to discuss how we can help you set up a group savings plan tailored to your company's needs and budget.
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