The Bank of England has warned the UK is set to experience its biggest inflation surge in 42 years, one that could slump the nation into a recession comparable to the financial crisis. And people are frightened: Frightened of falling into debt, of having their savings wiped out. Frightened by soaring energy and fuel prices. Frightened and anxious about how they’ll make ends meet.
Given the gravitas of what’s ahead, it’s hardly surprising to hear that financial stress is having a detrimental impact on the mental health, and consequently the productivity, of workers. In fact, as many as two-thirds of UK employees say money worries are affecting their mental health and three-in-five claim financial distress is impacting their performance at work.
The extent to which financial wellbeing impacts mental health, and therefore presenteeism and the ability to work, cannot be underestimated. It is time for employers to take the financial wellbeing of their people seriously.
Worryingly, many employees feel their workplace offers them little or no financial wellbeing support. Research by Wealth at Work found half of working UK adults receive no support from their employer on how to understand their finances. Whilst a separate report from the Building Societies Association (BSA) found only 24% of employees think that their employer cares about their financial wellbeing.
Many employers assume that providing a path to financial wellbeing or security means increasing salaries or awarding large bonuses. Although we’ve already seen some companies offering pay raises and bonuses to their employees as a direct result of the cost of living crisis, it’s important to know that, however helpful, a cash injection is just one of many ways businesses can support their employees through this time.
Here we provide a further three simple ways UK workplaces can help their employees manage financial stress:
- Normalise talking about finances in the workplace: Most people struggle to admit when they are in trouble, especially if the difficulties they’re facing concern money. When we are worried about a situation, like finances, we tend to avoid talking about it with anyone at home and at work due to fear or feeling overwhelmed. In fact, almost three-quarters of employees said they’ve never spoken to their employer or line manager about financial wellbeing. The longer someone remains stressed, the more their mental health declines and the more detrimental the impact on their productivity, sleep and relationships. Employers can help their staff by normalising the topic of financial wellbeing through existing support mechanisms like Employee Assistance Programs (EAP) which usually include an array of staff benefits including a focus on wellbeing support via counselling or other talking therapies. Employers may wish to consider providing wellbeing advice to employees via internal communications hubs. Forums like this can act as a safe place to talk about money related worries and will help to normalise talking about finances.
- Offer flexible working hours: Managers should consider allowing more flexibility for employees who are dealing with high-pressure financial situations during the working day, rather than restricting these conversations to outside working hours or in lunch breaks. Managers could give employees the time to deal with stressful calls or tasks, such as buying a house, or rectifying a missed payment. It could help prevent the build up of anxiety through the rest of the working day. Providing this type of support will help stop the situation spiralling and will, in all likelihood, have a positive impact on the productivity of the employee.
- Tailor the benefit to the employee: Each and every employee will experience different pressures during the cost-of-living crisis. As such different employees will find different benefits helpful to them or the stage of life they are at. For example, a parent may find it helpful to receive additional childcare support. And a graduate may be interested in a salary advance scheme combined with awareness of budgeting towards the next pay date. Ultimately, there is no one-size-fits-all approach when it comes to helping employees with their financial wellbeing. But talking to them and figuring out how to help people individually could be instrumental to improving their financial wellbeing and, ultimately, their overall mental health.
Workplaces play a key role in financial wellbeing. Not only because mental ill health can impact employee performance, but also because of the sheer amount of time we spend at work. Families are already struggling to navigate rising inflation rates and soaring energy and fuel costs – Citizens Advice says the crisis support it’s giving is growing at record breaking levels. Businesses must put their plans into action and make their employees’ financial wellbeing a priority.