How financial stress chips away at the workplace, and what you can do to help
Financial stress is an increasing factor in employee wellbeing, and an insidious problem. Many employees aren’t comfortable discussing their financial situation with their employer and as a result a source of serious workplace angst can go undetected.
It might not be obvious to the naked eye, but financial instability is rife. Half of employees reported financial pressure affecting their job performance and relationship with their colleagues. Nearly two thirds of employees have borrowed in the past year just to cover their living costs, 37% use credit cards and 8% use payday loan companies. Only a third of UK workers are actively saving towards a goal, despite more than half of them feeling pressure to put more money away.
Don’t fall into the trap of thinking just because you pay your staff a competitive wage you’re exempt from the issue; among people earning £40,000 – £60,000 a year the rate of financial stress was still as high as one in five, and of employees suffering financial stress a whopping third actually don’t think they need any more money.
While the problems caused by financial stress can go under the radar, the dangers to staff are very real. Stress causes ulcers, migraines, back pain, anxiety, depression and even heart attacks. Extreme stress can lead to obesity, high cholesterol, diabetes complications and heart disease.
Dealing with the physical effects leads to absenteeism, with some reports showing up to 70% of the problems patients go to their doctors for originate in stress.
Meanwhile the psychological effects have an effect on your business too. Stressed workers struggle to focus on tasks, and ‘presenteeism,’ where an employee occupies a desk without doing any valuable work, sets in. An individual staff member could be losing three days a month, 17.5 million days a year in the whole UK workforce, just to financial stress.
The problems don’t stop there, either. Unchecked stress ramps up negativity and social aggression, chipping away at team dynamics and creating tensions you’ll struggle to resolve.
Increasing employee financial awareness is becoming a vital arm of employee wellbeing and a lot of companies are scrambling to find an answer.
How employers can help employee financial wellbeing:
It might seem like the obvious thing to do, but obvious solutions aren’t always the most effective ones. Giving staff more cash will help alleviate stress, but it’s not a silver bullet for all of your employees.
An employee with poor budget planning, a personal life in crisis, or a spiralling financial situation will find their outgoings rubbing against the strains of their new budget and will need more thoughtful help than extra cash.
Some employees just don’t have control of their finances, and the feeling of helplessness is a source of constant stress which soaks up swathes of mental energy. Just having an actionable plan to get someone’s financial situation back on track could do a great deal to instil a sense of control and alleviate the daily sense of chaos while at work.
Other employees might just have some stress around setting up a pension, impending retirement, dealing with mortgage applications or how to invest capital and need guidance from an expert.
Your business could save a lot of irritation and help productivity by offering employees a pathway to financial help.
A lot of employees feel their employer simply isn’t that interested in their financial wellbeing. Only 3% of employees would consider going to their manager or human resources department for help with financial trouble.
Even if these companies would be happy to help their employees, they’re not doing enough to demonstrate their empathy to their staff. If you sense an employee is struggling it pays to reach out and open a dialogue.
Run a Saving Scheme
You can cost-effectively introduce a saving system to your business. It could be an informal meeting with staff who have expressed financial difficulty to share support and ideas every month, a membership to a wholesaler like Costco to save on high volume items, or a discount scheme for daily purchases to stretch household budgets.
Get Employees Engaged with Benefits
Whatever benefits packages you do offer, make sure it’s not just ticking a box to be able to say you offer it. Measure the level of engagement you currently have with your employees and make sure they’re getting the most out of what you’re offering.
Young people are far more at risk than older people for financial stress and money instability in general. If you’re thinking of introducing a plan to curb financial stress in the workplace, make sure it’s tailored to include your younger staff members.
Young people are making up more and more of the workplace and they’re less financially stable than previous generations: 16% of people under 24 have already defaulted on debt, and many more will bring poor financial habits into your business’ workforce.
These are just suggestions to get your cogs turning. Make sure long before you take any action, you thoroughly assess exactly what it is your employees are struggling with and make sure the solution is bespoke to their specific needs.