According to the Chartered Institute of Personal Development, one in four (25%) of employees are experiencing financial difficulty so serious that it is affecting their ability to do their job. One in ten said they have found it hard to concentrate/make decisions at work because of money worries and 19% have lost sleep worrying about money, all of which impact productivity.
Our own research found that financial concerns were one of the top two causes of mental health issues in the workplace.
The NHS states that feeling low or anxious is a normal response to struggling with debt, and as Mind points out: “Money and mental health are often linked. Poor mental health can make managing money harder and worrying about money can make your mental health worse.”
It’s therefore important that businesses understand what is causing financial stress, and implement ways in which they can help their employees improve their financial wellbeing.
What affects employee financial wellbeing
It’s not surprising that many employees are stressed about money; the average UK household owes £12,887, before taking their mortgage into account.
High rents in major cities like London, Manchester and Birmingham are also preventing people (particularly the young) from putting aside some savings. Figures released by the Local Government Association found that one in seven private renters pay more than half of their wage on rent.
Research by the Financial Conduct Authority found that 4.1 million people in the UK are in serious financial difficulty. Unsecured debt as a percentage of household income reached 27.4% in 2016, which is the highest figure in eight years (figures from the ONS for 3 months to the end of September 2016). Those aged between 25-34 have the most debt, which has been built up by university fees, credit card debit and loans.
It’s worth remembering that it’s not just low earners who are affected. According to the CIPD research, one in five of those who earn between £45,000 and £59,999 cited that anxiety over their finances affects their productivity.
People are seeing their wages been stretched further and further. Additional pressure is also applied whilst wages continue to remain stagnant.
How you can support employee financial wellbeing
As an employer, what you can do to support your employees depends on several factors, like the size of the organisation, needs of the workforce, and resources available.
Some ways in which you could support your employees, include:
- Pay them on time: It goes without saying that this will help employees manage their finances. While most businesses always pay on time as a matter of principal, it should be a priority for every business.
- Training and education: Budgeting, managing debts and generally getting to grips with finances are skills which some people are yet to develop. You can encourage your staff to better understand their finances by providing them with training opportunities. From an online ‘finance wellness’ course to a financial management workshop, there are plenty of training options you can use to support your workforce.
- Support: Provide your employees access to an Employee Assistance Programme specialising in finances. They will be able to help recommend relevant resources on everything from debt management to financial assistance. With Benenden Healthcare for Business employees will benefit from a 24/7 psychological and wellbeing line, alongside healthcare support, where they can get support from a mental health expert. In addition, a Benenden Health Cash Plan also comes with an Employee Assistance Programme (EAP) as standard – that’ll provide your employees with 24/7 access to counselling, medical and legal helplines. Benenden Health Cash Plans also provides money back to employees on medical costs such as dental, optical, physiotherapy and prescriptions.
- Season ticket loans: For employees who use public transport to travel to work, it is often cheaper to pay for an annual ticket up front, rather than monthly or weekly ones. Many employees however can’t afford the cost of this up front therefore you could offer them a season ticket loan. Your company would pay for the cost of the ticket up front, and then take the repayments of the loan directly from their net salary.
- Employee discount programmes – provide a discount programme which enables employees to save money on everyday purchases. this can include instore and online vouchers, discounted rates at retail and leisure facilities, cycle to work schemes, and employee cashback schemes. such as dental, optical, physiotherapy and prescriptions.
- Offer flexible working: Commuting is expensive and time-consuming. Free up your employee’s time and money by offering working from home for a day or two each week. Alternatively, you could allow flexible working hours, to enable people to travel outside of peak hours where the cost of travel is reduced.
- Pensions: While auto-enrolment is helping to encourage employees to plan for their future, it’s estimated that between 8 – 10% of employees are choosing to opt out. You could help your workforce understand the importance of planning for their financial future by running a Q&A session with them (and allowing answers to be submitted anonymously beforehand to avoid any embarrassment).
It may be that the package you offer your employees is meeting the needs of some but not others. Research by Neyber showed that financial worries can differ by age, for example, 45% of those aged between 18-24 said their income can fluctuate by more than 10% each month. This dropped to 21% for those between 55-64.
It’s therefore worth speaking with your employees to understand what financial support and benefits would resonate well with them, before planning or reviewing your businesses wellbeing package.
Have you recently implemented a financial wellbeing programme? Let us know how you support your employees on Twitter and LinkedIn using #financialwellbeing
Benenden is a not-for-profit health and wellbeing organisation, offering award winning employee healthcare, an extensive range of onsite health assessments and a business health cash plan.
To find out more about our products and how we could help your business, visit www.benenden.co.uk or call 0800 414 8179.
This content originally appeared on Benenden’s workplace hub where employers can find a range of related articles to help with their health and wellbeing strategy
