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Eugene Farrell

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Wellbeing at work: Ease employees’ money worries

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Financial issues affect all types of employees yet it’s a subject that’s often ignored in the workplace. However when this type of issue gets out of hand it can have serious repercussions for employee performance and productivity, not to mention attendance and engagement.

Eugene Farrell, Immediate Past Chair UK Employee Assistance Professionals Association (www.eapa.org.uk), looks at the benefits of work based counselling for financial problems and discusses how employers can make sure this personal and sensitive issue is managed and communicated in the most diplomatic way for all those concerned.

The impact of poor financial education

Managing money is something that’s often easier said than done and when things get out of control the impact could be significant and considerable evidence points to a strong link between money management and stress, anxiety and overall wellbeing.

Research commissioned by the Consumer Financial Education Body (2008), for example, points to a strong link between financial capability and psychological wellbeing. The study shows that higher financial incapability is associated with higher risk of mental ill health, lower reported life satisfaction and health problems associated with anxiety or depression.

These findings are significant for employers when one considers that stress is a major cause of absenteeism and presenteeism in the workplace. According to a report by the Chartered Institute for Personnel & Development and Simply Health (2010) over one third of employees report stress-related absence has increased over the last year.

An employer’s role in financial education

With nearly seventy per cent of people admitting to spending time thinking about their finances instead of working, and five per cent of people have taken time off work during the past year because of money worries, (AXA 2010) personal finance is certainly an issue that employers need to get involved in.

AXA’s Money Sickness Syndrome report, published in 2010, really puts the impact of poor financial education on employees and their workplace into perspective. According to the study up to 42 million adults from top managers to manual workers could be suffering from finance related stress. And with 1.4 million workers admitting to taking time off work because debt and bills are a daily worry, according to a poll by YouGov using the AXA My Budget Day tool for employees, the potential impact of poor personal financial management on an organisation is significant.

Considering the findings of these studies, it’s seemingly impossible for debt not to have an impact on performance at work. This impact might relate to the stress of problems on an individual, their performance and their interaction with customers or colleagues, or the time an employee is distracted from their work because they are on the phone to creditors to resolve debt issues. Such presenteeism is a real problem for employers and is likely to cost them 1.5 times more than absenteeism (Sainsbury Centre for Mental Health 2007).

Taking steps to support employees

Reassuringly, though, many employers are waking up to the reality of financial issues on their people. According to the Standard Life’s recently published ‘Insights into Financial Responsibility report, 80% of employers feel responsible for their employee’s financial security and 22% of employers regard their workers’ financial security as their primary responsibility. There is other evidence that helping employees understand finance better through education, and providing support will reduce anxiety and improve performance. (Joo, Garman 1998) (Garman et al 1999).

For this engaged group of employers there are a number of tools and solutions that can help them to support their employees when it comes to managing money. Financial education programmes are an increasingly popular way for employers to support their workforce. The Consumer Financial Education Body (www.cfebuk.org.uk), for example, offers a free, impartial programme of financial education delivered to employees in the workplace.

Other options include giving employees regular access to financial experts so they can raise any financial concerns with experts in the field in a confidential environment or they may publicise details of useful contacts and organisations, such as the Citizens Advice Bureau or their own Employee Assistance Programme (EAP) help-line that can offer support in this area. An increasing number of employers are also encouraging employees to spend a set period of time every month or week focusing on their personal finances.

EAPs are uniquely set up to help people with the emotional – as well as the practical – aspects of financial stress through, for example, money advice, benefits entitlement, debt counselling and budget planning tools. Around 1 in 20 cases seen by EAPs seek debt support and advice, although this number is likely to be much higher considering the coexistence of debt related problems behind other issues such as relationships, property division and child support.

Of course, much of the success of helping employees with personal debt or financial issues comes down to the attitude of line managers. In this respect, organisations need to consider how the approach or response of line managers can affect an employee’s willingness to tackle or even acknowledge debt issues in the workplace.

Ultimately, just as many  organisations have encouraged employees to approach their line manager with any other issues or concerns, whether this relates to workload, career progression or bullying in the workplace, the same must be true when it comes to financial education. Line managers need to be trained to recognise signs and behaviours that could indicate personal financial issues – such as poor performance, poor work relationships, absence, lateness and stress – and be equipped to provide the appropriate referral information for employees to seek assistance.

Eugene Farrell is the Immediate Past Chair UK Employee Assistance Professionals Association – to find out more visit www.eapa.org.uk

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