Helping Your Employees Secure Their Financial Future
The financial wellbeing of your employees can significantly affect the output and performance of your organization. Willis Tower Watson’s study on employee financial health points out that organizations that prioritize employee financial wellbeing reap competitive advantages such as fewer absences, higher levels of productivity, and greater employee engagement. While it may feel intrusive at first to discuss financial wellbeing with your staff, most employees are actually appreciative and welcoming of their employer’s efforts in helping them attain financial security.
In this post, we’ll outline two ways to help employees stay on top of their money and keep financial anxiety at bay.
Provide a robust financial wellness program
Having a financial wellness program in your organization is a must. In essence, a financial wellness program is a plan designed to help your employees shift their attitude and behavior towards their finances. Depending on the needs of your workforce, your financial wellness program may have a number of different goals — whether it’s the heightened utilization of available company benefits or providing financial literacy education to alleviate employee financial stress.
When creating a financial wellness program, an article on Corporate Wellness Magazine highlights that you should marry the needs of your company with the interests of your employees. In addition, you should also base your financial wellness program on available company data and employee surveys. This allows you to make sure that your financial wellness program fits well with your workforce and the goals of your organization. You can also employ the services of a financial advisor who can provide one-on-one financial coaching to your employees. With a financial wellness program, you can help your employees better understand complex and confusing financial concepts, which will eventually help them attain financial independence and personal success.
Help employees save for their future
Saving is an essential financial concept that everyone should master. For this reason, you should encourage and help your employees save for the future. Start by introducing them to different investment and savings accounts that can help them grow their money. One example of this is a registered retirement savings plan (RRSP), which is a tax-advantaged retirement savings account. Aside from their savings, they can also hold various investments in an RRSP, such as cash, savings bonds, GICs, ETFs, mutual funds, income trusts, and more. TD’s article on RRSPs and TFSAs notes that contributing to an RRSP allows them to grow their money tax-deferred inside the account. However, your employee will have to pay taxes when they decide to withdraw funds from their account.
Another essential investment and savings account that you can recommend to your employees is a registered education savings plan (RESP). Just like RRSPs, RESPs are also tax-advantaged accounts, but instead of retirement, these are designed to be used to help the holder and their beneficiary save for higher education. A guide to RESPs by Wealthsimple points out that the funds inside the account can be invested in a number of ways to encourage growth. In addition, the gains inside the account won’t be subjected to income taxes as long as they’re used for higher-education expenses. An RESP is perfect for your employees who have children or may want to pursue higher education in the future.
There are a ton of other savings and investments accounts that your employees can open to secure their future. To make saving easier for your employees, advise them to automate their contributions. This allows them to not actively think about saving and ensure that they complete their monthly dues.
Making sure that your employees find financial stability and success can translate to tangible benefits for your organization, such as an increase in productivity, better workforce dynamics, and higher retention rates. But of course, managers and business leaders should also improve their financial literacy to pivot the organization towards success. If you don’t know where to start, read our list of ‘Essential Finance Skills for Managers’.