Financial stress can cause presenteeism, absences, and decreased performance
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38% of Canadians say that personal finances are their biggest source of stress. And so, Lindsay, when the panel was up here, Lindsey talked a little bit about that being the number one stress. We all know that people are stressed throughout the day and Penny talked a little bit about presentism. The problem is that presentism is a real factor.
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When people go to work and they're stressed about their personal finances, they may not be able to perform their duties and they're more likely to make these mistakes on the job.
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A recent Harvard and this is US data, but I have Canadian data as well. So, a US Harvard Business Review has roughly estimated that Presenteeism costs the economy $150 billion
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in lost productivity. That far surpasses the cost of absenteeism. So presenteeism is a real thing. And in a 2018 Sanofi Canada survey, it found that 26% of planned members took time off work or left work early. So that's 1/4 of your workforce. And those individuals who reported missing work were reporting late to work an average of 13.8 times.
Group retirement savings plans help attract, retain and motivate employees
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So what? What does this all mean for you as an employer?
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This is a little bit of a sales pitch on my behalf, but if you don't already have a group retirement plan in place, please feel free to reach out to any of the group retirement consultants. We're happy to have a conversation with you about why we feel a group retirement plan would be valuable for your organization.
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Group retirement plans have shown not only to increase employee productivity,
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it's also shown to increase attention,
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help increase attraction,
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help with retention
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and help the employees’ ability to focus on the job.
Sound financial advice can help employees increase their overall wealth
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The second thing is educate, educate, educate. So, the panel earlier talked a lot about education and communication. Leanne was talking about it. Terry was talking about it.
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Certainly, my focus as a group retirement consultant is to work with employers to help employees understand the importance of staying the course. We are all emotionally attached to our money, right? We never like to see our account values go down. But if we can keep in mind what our goals are if our savings goals are long term and we know market corrections happen,
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we can ride out the storms through market volatility.
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Typically when markets are doing well, you can see here people are hopeful, they're thrilled, they're elated, they want to dump money into the market. And then as soon as markets start to cool off, we start to panic and we start to think about, is now the right time to stop contributing to the plan? Maybe I shouldn't contribute as much. Maybe I should pull my money out of the market.
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The challenge is, is that the units of funds that we buy are tied to exactly that. Units multiplied by your unit value get your overall account value. If you're making a $100 contribution and you're buying units when the market is high, let's say the unit value is $10. You're buying 10 units at $10, which equals your $100 contribution. If the market goes down and the price drops to $5, now you've doubled the number of
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units you hold. So, when the market goes back up to $10 a unit, you're so too does your unit value, your overall unit value. So, it's important to keep in mind what really matters is the number of units you hold. What's going to fluctuate on a day-to-day basis is the unit value.
Plan sponsors can enhance some benefit offerings at little cost to themselves
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The other thing that I wanted to talk about is what you as a plan sponsor can do to add additional benefits to your program. So, people are always employers are often looking for other ways to enhance or beef up their retirement offering programs. There are additional programs that are very little cost to you as an employer that are made available at the record keepers like Tax-Free Savings accounts. Like Lindsay was talking about the first time Home Savings account
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1st,
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not first,
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the first home savings account, lifelong Learning plan, RRSP, RESP, and Student debt repayment programs, a lot of the insurance carriers are starting to bring those products to the table to help employers enhance their retirement savings programs. And yes, I'm here to talk about retirement. And yes, that is certainly our focus is getting employees to retirement. But
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who am I to say that every employee within my organization needs to be focused on retirement savings? Maybe I am looking to buy a house or maybe I am looking to pay off student debt. And maybe those are my priorities at the start of my career, at different points in my career.
Working with a financial advisor through our Make Sense complimentary service can help employees increase their wealth
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When it comes to absolute value, it's not only about an adviser's ability to display empathy, to drive trust and a feeling of comfort. This study shows that those who work with an advisor tend to spend less, save more, and they tend not to be as emotional with their money.
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Just a little bit of a plug for Make Sense and the program that we offer. So, we offer a unique service in the industry. It's called Makes Sense, where we provide support to your employees if they have questions about their retirement savings programs. And we help them with things like completing their enrollment form to get into the plan, helping them with decisions as they transition from being employed to retirement, or helping them build their investment strategies when they're in the thick of their
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career.