Happily Ever After?

By: Robyn Thompson

The high workplace cost of divorce

How divorce affects employee productivity

In a highly competitive labour market, employers are doubling down on their employee benefits to attract and retain top talent. In a recent survey from Mercer, almost three-quarters of large employers plan to improve their benefits in three key areas: financial wellness, family support, and compensation strategies. Yet one benefit that is often overlooked is support for those employees going through a separation or divorce—even though it may affect half an organization’s workforce and cost their business millions of dollars each year.

A study from Good Housekeeping found that, among employees going through a separation, over 80% reported a loss of productivity; 73% experienced higher absenteeism; 67% said their health and financial well-being were negatively affected; and 67% said their job performance declined. As much as employees may try to separate their personal issues from the workplace, the impact of a separation reverberates on the job. It’s time HR policies reflected the reality that, in Canada, nearly 40% of marriages fail.

Even without the added strain of separation, rising interest rates and the higher costs of living and education are affecting many employees. Women report feeling the most stressed by their financial circumstances. According to the annual Manulife Stress, Finances, and Well-Being report, women are more likely than men to report feeling economic pressure, experiencing poorer mental health related to economic strain, and being less certain of their retirement plans. A separation adds a new layer on an already stressful situation.

Working mothers typically experience more negative financial outcomes from divorce because they have to juggle the financial costs of child-rearing along with the impact that family responsibilities have on their time, energy and earning capacity. Post-divorce, women’s average household income falls 41%, twice as much as men’s.

The Takeaway: How to support employees through a divorce or separation

Increasingly, employees are looking to their organizations to offer support programs such as financial planning that includes budgeting and retirement goal setting. In the Manulife survey, 82% of Canadians said they looked to their employers to offer financial wellness resources. Some leading organizations in the U.S. and U.K. are diversifying their financial wellness benefits to include support programs for working parents throughout the entire lifecycle of divorce: before, during, and after. The goals of these programs are to support employees’ physical and mental health to reduce productivity losses and absenteeism due to the financial, legal, and health issues related to divorce proceedings.

Currently, human resources policies include major life events such as the birth of a child, but they do not formally recognize divorce as a major life event warranting employer support. How many organizations even track the number of single, divorced/separated and co-parents in their ranks? Employers who want to meet their employees where they are in life, should consider diversifying their benefits to include divorce support programs which could save their companies millions of dollars each year in lost productivity, higher healthcare costs, and absenteeism which alone costs nearly $2,000 per employee.

Meet your employees where they are by offering workshops and coaching through direct contact, virtual education workshops, mobile and in-person advice, and purpose-driven keynote speakers. Surveys show that employees who work with a financial advisor are more likely to see their workplace as a source of help and they feel better about their finances. Divorced workers are more likely to lack sufficient retirement savings. By offering access to a financial advisor, workplace financial literacy resources, and retirement planning, employees will experience improved mental and physical health and higher workplace productivity— and this has a direct impact on the company’s bottom line.

Diversifying workplace benefits to include meaningful support for those employees experiencing a divorce is a kind of ‘happily ever-after’: a win-win for the employer and the employee.

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Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned are illustrative only and carry risk of loss. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please contact the author to discuss your particular circumstances.

Content copyright © 2023 by Robyn K. Thompson. All rights reserved. Permission to reprint articles by Robyn K. Thompson, is hereby given to all print, broadcast and electronic media provided that the contact information at the end of each article is included in your publication. Organizations publishing articles electronically, a live, clickable link to robynthompson.money must also be included with the body of the article.

Any questions, please email to robyn@robynthompson.money. Thank you.

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