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BCBusiness + Montridge Advisory Group A stronger workforce benefits your company's bottom line
Judith Mewhort, managing partner at Montridge Advisory Group
A recent State Street Global Advisors survey found that nearly 60 percent of employees are emotionally stressed and distracted by their financial situations, “to the point where worksite productivity is being compromised by absenteeism, decreasing engagement, and other factors,” according to Judith Mewhort, managing partner with Montridge Advisory Group Ltd.
It’s hardly surprising, given that Canadians in general are living beyond their means. The root problem isn’t spending per se, but the fact that a significant number of people are ignoring their personal finances due to confusion, a lack of knowledge, or simply being overwhelmed. As a result, they (especially millennials and those of Generation Z) are looking to their employers for education and assistance. “Some studies show that up to 84 percent of employees want their employers to provide money management education,” says Mewhort.
Whether or not it’s fair for employers to shoulder the burden of helping staff improve their poor financial literacy, it’s essential to the firm’s bottom line—and companies such as Montridge can make the task feasible by supporting them with a host of strategies. “For example, many of our clients stage lunch-and-learn seminars in the workplace with guest speakers who discuss the basics of debt and budgeting,” says Mewhort. “Other clients have developed effective employee financial wellness programs that focus on the ways to save and invest money.”
One of the most common strategies an employer can undertake is to assess and adjust their employees’ total compensation package to include elements such as retirement plans and payroll savings plans.
“When employees see just how much money they can save over a period of time, it really impresses upon them the power of money management and inspires them to get involved in other aspects of budgeting,” she says.
For younger workers who tend to switch jobs, or even careers, compensation packages with supplemental plans are an effective way to alleviate the symptoms of financial stress, even though these plans don’t address one’s lack of money management skills.
“Providing workers with flexibility is always helpful,” says Mewhort. “For example, a supplemental health-care spending account would give the recipient a certain amount of money annually to spend the way he or she sees fit, on health-care related products or services. A lifestyle spending account would do the same, only the money would be used for things such as gym memberships, child care, even transit passes.”
Another benefit of tailoring compensation packages in this manner is that it imparts the clear signal to employees that their employers care for their wellbeing.
“The point is that employers can tailor benefits any variety of ways these days, in order to give individuals the things they value the most,” says Mewhort.
“The key is to let your people know they aren’t alone and that help is available to remedy their financial worries. So many tools can be implemented with little or no cost—and the dividends are enormous.”