BUSINESS
09/04/2019 11:29 EDT

Canadians' Money Stress Costs Businesses $16 Billion A Year: Study

Overwhelming debt and a rising cost of living are the leading causes.

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TORONTO ― A significant number of employees admit that their workplace performance has been eroded by the stress of their personal financial situation, a report from the Canadian Payroll Association says.

Association president Peter Tzanetakis said the annual survey paid increased attention to how much time Canadian employees are distracted by their personal financial situation.

Nearly one-quarter of nearly 4,285 employed people surveyed said they agreed or strongly agreed that stress about personal finances had an impact on their performance at work, with about 70 per cent indicating such matters occupy up to 30 minutes of a typical work day.

Watch: Money stress is real ― even more so for women, study says. Story continues below.

 

And about 43 per cent of respondents agreed that “stress related to personal finances has had an impact on my workplace performance.”

The rising costs of living and overwhelming debt were among the biggest sources of stress identified by the online survey conducted by Framework Partners between April 24 and June 18.

“The key message has always been that ... over 40 per cent of Canadians are living paycheque to paycheque,” Tzanetakis said in an interview ahead of the survey’s release Wednesday.

“But as the survey has evolved over the years, we’ve gone a little bit deeper to understand some of the sources of the financial stress ― and also some solutions as well.”

The 2019 survey found, among other things, that 40 per cent of respondents felt “overwhelmed” by their debts to some degree ― including nine per cent who “strongly agreed” they felt that way.

Tzanetakis said, apart from the amount of debt, there’s a concern about the nature of the debt ― with one in three saying they carried credit card debt, which may charge a higher rate of interest than mortgages, lines of credit or vehicle loans.

“And four in 10 (with credit card debt) say it’s going to take more than a year to pay it off. I think that’s what’s leading to this feeling of being overwhelmed by debt.”

No margin for error

The survey also found 43 per cent would have trouble if their paycheque was delayed by a week, including 13 per cent who indicated it would be “very” difficult.

About one-quarter of respondents said they spent all of their net pay from each period and nearly two-thirds of respondents said they spend less than their net pay in a typical pay period.

The survey cannot be assigned a margin of error because online polls are not considered random samples.

Can employers help?

Tzanetakis said about 55 per cent of Canadian businesses offer to automatically move some of an employee’s pay into a separate account to encourage savings but only about one in three Canadian employees participate.

“So there’s still lots of room for improvement. We’re encouraging employers to really look at that and use the expertise in their payroll departments to set up such a plan and manage it for them,” he said.

“It really does contribute to an alleviation of some financial stress if you’re not worrying about savings as much.”

The survey also found about three-quarters of respondents would be interested in general financial education programs in the workplace, including 27 per cent who said they’d be “very” interested.

“Certainly there’s a role for government and the educational system. ... We’re just trying to raise awareness among all stakeholders at this point in time.”