Many Canadian employees say they’ll have to delay their retirement because of financial concerns, and unless employers do more to help, their company’s productivity could suffer, an industry body warns.
A new survey from the Canadian Payroll Association (CPA) suggests 47 percent of working Canadians would find it hard to meet with financial obligations if their pay was delayed by a single week, and 41 percent are spending all or more of their net pay.
While financial experts recommend putting 10 percent of income into savings, 42 percent of respondents said they save five percent or less.
The numbers are especially alarming for workers nearing retirement age: among those aged 50 or over, nearly half (47 percent) are less than a quarter of the way to their retirement savings goal.
More than one third (35 percent) of 50 to 59-year-olds are spending all or more of their net pay, while 38 percent save five percent or less of their income.
That mean many are having to put their retirement plans on ice: 46 percent of respondents said they will have to work longer than they planned five years ago, with the top reason cited that they are “not saving enough”.
CPA vice president of operations Janice MacLellan says those numbers should ring alarm bells for employers.
“Financial stress and the financial situation of individuals is starting to spill over into the workforce in terms of their performance,” she told HRD.
“There is an opportunity for employers ... to assist their older workers to transition into retirement to open up those spaces, perhaps there’s an opportunity to invest a little bit more in financial planning programs or financial literacy programs for them, to make them feel a bit more comfortable in taking that step, or getting their financial situation under control, so they can be prepared to retire and move on.”
MacLellan adds that in the nine years CPA has been conducting the survey, “the needle hasn’t really moved forward a lot”.
“HR professionals need to start paying attention: this does not just focus on the older demographic, but the entire demographic range from millennials right through to baby boomers.”
MacLellan suggests employers should explore whether they can enable workers to divert some of their pay cheque directly to a savings account.
“I would recommend that HR professionals look at ways that they can be part of this campaign which is to help people right at the source start managing and improving their savings.”
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