According to an analysis of the National Payroll Institute's Annual Survey of Working Canadians conducted by Canada's Financial Wellness Lab, the number of working Canadians facing financial stress has surged by 20% in the past year alone, reaching an alarming 37% overall. This trend began in 2021, following a brief respite during the pandemic-induced lockdowns in 2020.
The primary factors contributing to financial stress include increasing debt, inadequate savings, and excessive spending. With rising interest rates, inflation, and the cost of living, these challenges have negatively impacted the financial wellness of many working Canadians, making it crucial for them to take immediate action.
The ramifications of this financial storm are not limited to individuals; they extend to workplaces as well. Financial worries are eroding productivity and employee engagement, with 40% of stressed individuals reporting a negative impact on their job performance.
On average, Canadian workers spend 33 minutes daily thinking about their finances at work, resulting in an estimated $45 billion in lost productivity for Canadian employers.
Moreover, one in five survey respondents had to take sick days to cope with the increasing financial stress, and one in ten considered leaving their jobs altogether.
Earning more money, while a common solution, is not the sole key to improving financial wellness. The research reveals that 35% of those in the growing stressed cluster earn over $100,000 annually. Instead, reducing reliance on debt and consolidating existing debts can significantly alleviate financial stress, given the high interest rates in the current economic climate.
To address these challenges, working Canadians need to make difficult choices regarding spending and prioritize essential expenses. Seeking professional financial advice can also be a valuable step toward achieving financial stability.
Canadian employers have a role to play in mitigating the financial storm's impact. Tools such as the National Payroll Institute's Financial Fitness Evaluator for Business can help gauge financial stress among employees and implement appropriate solutions. Encouraging automatic savings and investing in payroll professionalism to prevent delays can also be effective measures.
The current financial crisis in Canada is a severe emergency, and immediate action is required at both the individual and employer levels to weather the storm and secure a more financially stable future.
Did you find this article useful? Share your feedback