LifeWorks Financial Wellbeing Index reveals that more than one quarter of employees express inability to cover an unexpected financial need
LifeWorks, a leading provider of digital total wellbeing solutions, released its quarterly Financial Wellbeing Index (FWI) report, revealing a continued negative financial wellbeing score among Canadians.
Key findings:
- The summer 2021 FWI score is -1.6 compared to the pre-pandemic benchmark.
- The FWI score has shown improvement throughout the year, increasing more than one full point since the launch of the index (compared to -2.8 in winter 2020 and -2.2. in spring 2021).
- Women continue to have significantly lower FWI scores than men. This quarter, the FWI score for women is -3.5, compared to +0.3 for men.
- There is a significant variance in the FWI score by age group. The least favourable score is among those 20 to 29 (-11.6) while the most favourable score is among those 70 to 79 (+8.1).
- In the latest survey, 27 per cent of respondents indicated that they spend their entire paycheque in a typical pay period and seven per cent said they spend more. These groups have the least favourable FWI score (-17.1 and -22.9, respectively) when compared to the 66 per cent who spend less than their pay (+7.3).
- Parents are twice as likely as non-parents to spend more than their income.
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One in four Canadians express uncertainty in ability to cover an unforeseen financial need
- The research found that more than one quarter (26 per cent) of Canadians indicated they are not confident or unsure they could come up with $2,000 for an unexpected financial need.
- FWI scores improve as individuals express more certainty in their ability to cover an unexpected financial need. Those stating it would be impossible to do so report the least favourable score (-35.9), while those who are very confident in their ability to cover unexpected needs report the most favourable score (+12.7).
- Employed people who have maintained their salary and hours throughout the pandemic are two-and-a-half times more likely to report being able to cover an unexpected need when compared to those with reduced salary or hours.
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Comments from Idan Shlesinger, president, retirement and financial solutions and executive vice president:
“Financial wellbeing has remained top-of-mind for many Canadians throughout the pandemic, and while many employees have remained frugal to prioritize emergency savings, the research is telling us that a sizable population continues to struggle to balance spending and saving. The reality that many Canadians are unable to cover emergency funds is significant cause for concern and demonstrates a clear need for more education on the importance of financial health. Employers play a critical role in employees’ total wellbeing and its critical that they step up to address this.”
Salary identified as key to Canadians’ job satisfaction, with three-quarters willing to leave their organization for a raise
- The index found that only one-quarter (26 per cent) of Canadians are unwavering in their commitment to their organization, with nearly three-quarters of respondents (74 per cent) indicating that they would leave a job that they are happy with for an increase in salary.
- Twenty-two per cent of respondents said they would leave a job they are happy with for a salary increase of 20 per cent. Seventeen per cent of respondents said they would leave for an increase of 50 per cent or more.
- Only a small portion of employees (six per cent) would leave their organization for a five-per-cent increase in salary, and this group has the least favourable FWI score (-8.1).
- This aligns with the findings from the 39th annual Salary Projection Survey, which revealed that employers are planning for salary increases that could lead to a war for talent.
Comments from Paula Allen, global leader and senior vice president, research, and total wellbeing:
“The significant financial and social challenges that Canadian workers have faced throughout the pandemic has left many employees feeling apathetic and a sense of burnout, leading to what many are calling ‘The Great Resignation.’ Our research is showing that employers’ support for the wellbeing of their people is a major factor in mitigating this stress and burnout. Financial wellbeing is part of this. Wellbeing is much more than salary. Some with high incomes have low financial wellbeing scores. Support for financial wellbeing includes helping employees with the knowledge and actions needed feel in control of one’s finances.”
The full Financial Wellbeing Index report can be found here. This quarter, the report includes additional insights on the impact of employees’ financial state on productivity, the most valued financial savings programs offered by employers and more.
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