HR Policies To Help Businesses Reduce Costs And Help Employees Defeat Debt

2018-09-14   minute read

Leah Drewcock

Debt Solutions

As Canadians struggle with record-high consumer debt, employers have plenty of reason to worry. Studies show that financial stress leads to decreased productivity as well as increased sick time, absenteeism and turnover as employees seek higher paying roles. There's also the administrative time required to take creditor calls and process wage garnishments.

But this is not strictly an economic issue. Chronic stress due to unmanageable debt is also a leading cause of physical and mental heath issues such as chronic fatigue, high blood pressure, depression and anxiety. The longer employees struggle financially, the more likely it is to take a lasting toll.


The good news is that human resources professionals are in a unique position to assist employees currently experiencing overwhelming debt issues. By advocating for strategic policy initiatives to improve financial health throughout the organization, HR leaders can improve employee quality of life while increasing the output and quality of work and influencing a broad scope of administrative cost savings.

Open-Door Policy

People in crisis need confidants they can trust. As performance coaches, supervisors and human resources professionals are already skilled at building rapport with staff, they're in an advantageous position to assist with employee financial issues as well. The first and easiest step for any organization is to implement a clear and well-communicated open door-policy for staff to discuss their debt with leaders they trust.

The evidence shows that when employees trust their employer to create a safe, supportive and judgement-free space to speak openly about their finances, they're more likely to admit what's troubling them and more receptive to problem-solving ideas.

Improve Inter-Departmental Communication

It's not uncommon that the payroll department is the first to be aware of employee debt problems. Creditors will often call the employer to confirm personal details about overdue and delinquent debtors. And if the issue progresses to a court order, the payroll administrator will be responsible for remitting garnished wages.

Maintaining open communication between payroll and human resources helps the organization recognize which employees are at risk of performance or attendance issues, who might be pursuing new job opportunities or may require intervention for deteriorating physical, mental or emotional health. This information can save the organization money and ultimately improve outcomes for employees.

Add Financial Health to Benefits Programs

Consider the value of adding employee financial health incentives to your existing benefits program. While you may assume your staff are already financially literate, keep in mind that fewer than half of Canadians have a regular budget and more than two in five are less than $200 from making ends meet each month. By coupling financial education with existing RRSP matching, physical and mental health subsidies, you may find it not only increases the effectiveness of the former – but ultimately reduces the costs of the latter two. After all, we know reduced financial stress improves both physical and mental health outcomes.

There are a number of ways you could structure this: You may choose to offer practical workshops and training opportunities, such as budgeting and retirement planning. You may contract a debt counselor who your staff can access confidentially at no or little cost. Or you could also choose to include access to other peripheral resources such as addictions and marriage counseling.

Know the Resources Available

Licensed Insolvency Trustees offer the fastest and often least expensive path to eliminate consumer debt. Licensed by the federal government they're the only professionals in Canada who are qualified to administer Life-Changing Debt Solutions such as Consumer Proposals and bankruptcies. All Licensed Insolvency Trustees offer a Free Confidential Consultation to potential client's where they will collaboratively review their financial situation and help them understand their options. They will provide helpful advice and help the debtor make the best choice given all the factors in play.

If you have an employee who has expressed ongoing debt problems or if you hear from the payroll department about creditor calls or wage garnishments, refer them to a Licensed Insolvency Trustee. It is their best first step toward a financial fresh start and a debt-free future.

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