Frank Wiginton believes that an employee who has his or her personal finances in order is likely to be a productive employee.
But, sadly, that is not often the case. The Toronto-based chief executive of Employee Financial Well-Being, a company that delivers financial education to employees in the workplace, knows that many employees are under huge financial stress that is undermining their mental and physical health, and their productivity at work. Employee Financial Well-Being’s recent survey of 608 employees at Canadian companies with more than 50 employees found that one in four are financially distressed; and it found that these employees spend more than an hour of each working day dealing with their personal finances.
“Take a company’s total number of employees and multiply it by 25%,” Mr. Wiginton said. “Then multiply that figure by 225 working days a year, and that will be the number of hours of lost productivity in the past year.”
He noted that considerable attention is being given to the fact that Canadian schools are not providing students with sufficient financial education. “But the fact is that people under the age of 20 have few financial responsibilities so only the very basics, such as managing cash flow, will be relevant to them. Investing in the stock market and saving for retirement will not be relevant to most 16-year-olds.”
It’s usually after the age of 25 that people start taking on large financial responsibilities, he said. “They take out home mortgages and car loans, and start paying for children’s education. And they start putting money away for retirement. This often results in debt-management problems and in financial stress.”
Mr. Wiginton, age 38, is a certified financial planner and a registered retirement consultant, who has worked as a stock broker and a fee-for-advice financial planner. In 2007, he was invited to speak to employees of a recently merged company about changes to their pension program. After the success of that event, he began to hold seminars, often about pension plans or corporate restructuring, for employees at other companies.
“At first I saw this as an opportunity to bring in more financial planning clients,” he said, “but I quickly recognized that many employees had a serious problem. They didn’t know the basics of personal finance—tracking their spending, and determining their needs versus their wants. I met one man who was aggressively paying off his mortgage at an interest rate of 2.5%, while running up credit-card debt at 19% interest.”
This told him that many people just don’t get fairly straightforward financial concepts. “A survey commissioned by the Canadian Council on Learning found that 57% of Canadians scored low in numeracy, the ability to understand and apply mathematical information. Many people struggle with numbers, which is something we need to recognize in light of the fact that 99% of financial information is given in numbers. We need to cultivate their understanding in the context of their own situations and through stories.”
In 2011, Wiginton formalized his seminar outreach into a business. Employee Financial Well-Being currently has three facilitators — Mr. Wiginton serving central Canada, another facilitator in Western Canada and a third who delivers programs in French. And it provides five “financial wellness” programs for employees and executives at Canadian companies:
The Complete Financial Success Program, a 12-module program that takes employees through all aspects of personal finance – debt, cash-flow management, retirement and estate planning.
Pensions and Benefits, a four-module program that helps employees understand their pensions and benefits.
Executive Financial Success, a customized, one-on-one program to ensure that executives understand their compensation and other benefits.
Company Restructuring Program for employees who are impacted by corporate restructuring.
New and Changing Benefits, a program for companies that are adding or changing benefits, pensions or compensation plans. It explains these features and changes in the context of individual employee situations.
“We can also customize programs around the needs of specific groups of employees,” Mr. Wiginton said, “such as employees who are caring for elderly relatives.”
Typical employer-sponsored wellness programs, he added, focus on diet and exercise, but don’t include financial wellness. “It’s about time that employee wellness dealt with issues that matter most to employees. People under financial stress are more likely to suffer depression, anxiety, heart attacks, ulcers, digestive track problems and migraines.”
The benefits of employee financial wellness, he said, include increased productivity and commitment, appreciation of the company and its benefits, and employee retention. And a corresponding decrease in absenteeism and drug benefit costs.
Programs are delivered in the form of seminars, coaching, webinars, video blogs and live chat. “Seminars and one-on-one coaching are most in demand,” Mr. Wiginton said.
The cost to a company varies according to the delivery format, with one-on-one coaching being the most expensive. “In general, my services come to about $200 to $300 per employee. And there is also the cost to the company of employees leaving their work to attend the programs and having others fill in for them,” Wiginton said.
“Companies need to look at their employees’ financial wellness as a long-term investment.”
Visit Employee Financial Well-Being’s website at www.employeefinancialeducation.ca