Despite an improved financial picture, employed Canadians are falling short of taking advantage of the opportunity to save their earnings and reduce their debt. While 69% of employees that are trying to save more of their net pay responded that they have been able to save more of their net pay, 65% said they save 10% or less of their earnings, which is a figure below the recommended savings levels. In addition to higher living costs and unexpected expenses, this will likely lead to increased spending activity.
As a result, 40% of surveyed employees are feeling increasingly overwhelmed by debt, which is a 5% increase from last year's 35%. In the event of financial shifts, such as higher interest rates or a change in economic circumstances, many stated that they would be at risk, indicating signs of instability in their financial health.
If not addressed, this could lead to repercussions on workforce performance and productivity. In fact, 46% of employees said that financial stress is impacting their ability to do their best work in the workplace.
Payroll as the solution
As CPA President Peter Tzanetakis states, the right time to “pay down debt, contribute to retirement savings and take control of your financial future” is right now.
Companies can be leaders in addressing financial complacency in saving by urging employees to take the initiative to take control. This can be accomplished by leveraging payroll systems to empower employees to improve their financial health and wellness.
The CPA’s “Pay Yourself First” campaign offers an impactful solution, supporting people in putting away a portion of each paycheque—by arranging automatic payroll deductions to be allocated to a separate savings account—to pay down their debt or contribute to their long-term savings. Currently, 53% of respondents indicated their employers offer this option to employees; however 44% of employees still do not participate.
Payroll has the power to empower your people to take control of their financial wellbeing. By actively supporting financial wellness through offering this as an option to employees, your people will be inclined to take advantage of the resources given to them, encouraging them to contribute to and value their financial priorities as essential.
Get involved in National Payroll Week
Rise is participating in the Canadian Payroll Association’s 'Pay Yourself First' program by helping employees automatically save at least 10% of their earnings.
To participate, follow these instructions on how to direct a portion of participating employees’ pay into an additional account.