Check against delivery.
July 8, 2015
Toronto, ON
Thank you for the warm introduction. The theme of this conference, “Creating opportunity in a connected world”, aligns with my mandate to coordinate and collaborate with all sectors to strengthen the financial literacy of all Canadians.
Financial literacy is defined as having the knowledge, skills and confidence to make good financial decisions. Connecting Canadians to the right information is a critical part of what I do. When Canadians have the tools to make informed financial choices, their financial well-being improves and this has a positive impact on our economy.
Employers are in a unique position to engage with their employees to strengthen their financial literacy. Why bother, you might ask?
Because financial literacy can lessen financial stress for some employees and increase their take-up of workplace benefits. These, in turn, can lessen employee absenteeism due to stress, and improve employee retention, and all this supports a healthy bottom line for your business.
Research shows that personal financial stress leads to increased absenteeism and affects productivity. According to a 2012 study by Metlife:
- 52 percent of employers acknowledge that absenteeism increases when employees are dealing with personal financial issues;
- And 12 percent of employees at large companies have taken unexpected time off work to handle personal financial issues.
Sun Life Financial’s “Health Index” showed that the vast majority of Canadians – three out of four – are experiencing excessive or uncomfortable levels of stress. And their top three worries are about money, whether it is personal finance, the ability to stick to a budget or how to deal with unexpected expenses. These concerns outweigh their anxieties about personal relationships or physical health issues.
Many employers already address physical health through workplace benefit programs. Gym memberships and health coaches, for example, help decrease stress and absenteeism and improve employee health and productivity. Such benefits can also boost loyalty and commitment to the organization.
Workplace financial literacy should also be part of supporting employee well-being.
Today, I’d like to share some ideas with you about how to integrate effective financial literacy programs into your organizations. I’ll start with some background. As Canada’s Financial Literacy Leader, my job is to collaborate with organizations and individuals and to coordinate activities that strengthen the financial literacy of Canadians. That job title also reflects two interrelated commitments.
One, the undeniable need to help Canadians of all ages to gain the knowledge, skills and confidence about financial matters that affect them every single day. And two, the Government of Canada’s commitment to create a focus around this issue, to drive momentum and to build networks between public, private and non-profit sectors. Both commitments have propelled our efforts forward in the year since I was named to this position.
These efforts culminated in our release of the National Strategy for Financial Literacy—Count me in, Canada on June 9th.
We started from a solid foundation. We drew from the wise counsel of a National Steering Committee on Financial Literacy, made up of experts from the public, private and not-for-profit sectors. Our moderator, Gary Rabbior and my fellow panelist, Cairine Wilson are among its members. The committee’s expert advice was central in developing the strategy and will be instrumental in its implementation.
We were also guided by research. From the 2009 and 2014 Canadian Financial Capability Surveys, we determined the financial literacy levels of Canadians and gaps in their knowledge. We gathered our information from across the country, consulting with Canadians of different backgrounds, and with organizations in the private, public and not-for-profit sectors. Their ideas and concerns are woven into the strategy’s fabric.
The strategy’s vision—to strengthen the financial well-being of Canadians and their families—will drive our work forward. The strategy establishes three goals for all of us working in financial literacy in Canada. These are to help Canadians manage their money and debt, plan for the future and protect themselves from fraud and financial abuse.
Employers are well positioned to become valuable partners in implementing the strategy. There is ample evidence that employees want financial literacy programs offered in their workplaces.
So how do you provide a financial literacy program that will work with your employees? First, programs should be tailored to their needs and be easy to use and understand. Second, they should be delivered at the right time and place. And of course, sharing resources across networks will reduce duplication of effort and help us reach more Canadians.
It’s important to recognize that people learn in different ways. They have different needs and interests. We can address this by adapting programs, simplifying documents, communicating clearly and making financial education fun. It’s also important to integrate financial literacy efforts into people’s daily lives, by reaching Canadians where they already are, such as in the workplace, and when they need help.
Employers can engage staff at important transition points in life, such as when an employee begins a new job, starts a family or prepares for retirement.
As Financial Literacy Leader, I will continue to help organizations across sectors to forge partnerships, to ensure that efforts are coordinated and resources shared. A major achievement in that area is the Canadian Financial Literacy Database. It holds more than 900 shared resources that anyone can use to promote financial literacy. I encourage you to visit the database on our website, itpaystoknow.gc.ca.
Most large organizations already have structures in place that could be used to deliver financial literacy programs. For example, you can leverage your relationship with your employee insurance and pension benefits providers. Make sure your employees have the right information, in plain language, to help them understand the workplace benefits available to them.
In terms of optional coverage, they particularly need to know the costs and benefits of their decisions. Many people opt out of extended benefits – disability insurance, critical illness coverage, life insurance, pensions -- in order to keep more salary dollars in their pockets.
But have they really understood the long-term implications of those decisions? If they haven’t, down the road you may have some employees who are very stressed due to this lack of long-term planning. As mentioned, this kind of financial stress has an impact on employee productivity and encourages absenteeism.
The Chartered Professional Accountants Canada, or CPA, will soon release a nation-wide workplace financial literacy program. Cairine will speak more about this program momentarily. We, at FCAC, are also working with CPA on a pilot workshop to bring workplace financial literacy training within the federal government.
In closing, I would like to stress that we all have roles to play in helping Canadians develop the knowledge, skills and confidence they need to manage their money and debt, plan for the future and protect themselves against financial abuse. Employees are an organization’s most valuable resource. Delivering financial literacy to staff will help you achieve your organization’s objectives.
Please “count yourself in” as part of the campaign to improve financial literacy in Canada, and join me in implementing the strategy.
