Poor Financial Wellbeing
£15.2bn was the annual cost for UK businesses of staff absence, turnover and lower productivity, related to financial worries, revealed by Neyber in 2019. The finding that 3 out of 5 British workers of all income groups are affected by money worries was before the significant rise of unemployment, furlough and future uncertainty brought about by the pandemic.
There is a bigger cost to employees struggling financially. Children with a probable mental disorder are more than twice as likely to live in a household that have fallen behind with payments (MHCYP 2020).
Companies are now familiar with the concept of employee emotional health but fewer are aware of the financial pillar of wellbeing. Those businesses who have opened their eyes to the impact and responsibility they have for looking after their staff, find that they have more productive employees who are better engaged and that the company reputation is enhanced. Helping them is not as difficult as you might think.
We know that stress is bad for business. Put simply, our cognitive brain doesn’t function well when it is flooded with emotional arousal. That affects our capacity to engage, to perform, to achieve. Yet the connection between financial difficulties and mental wellbeing continues to be underestimated.
Research by the Bank Workers Charity (2015) and supported by the CIPD (2016), found that money worries were the biggest source of stress to UK employees.
Close Brothers (2019) discovered that:
- The overall Financial Wellbeing Index score for UK employees stands at just 53.6 out of 100.
- Three quarters (77%) of employees say that money worries impact them at work
- One in five (40%) employees worry about their finances either always or often
- Organisations are already feeling the strain from the lack of financial wellbeing on multiple fronts including: reduced productivity (22%); loss of talent (22%); higher short-term and long-term absences (both 19%); reduction in retirees (17%); and higher healthcare costs (13%).
We know that good relationships are critical to a work culture where people can thrive. Yet back in 2016, Neyber’s ‘DNA of Financial Wellbeing’ report found that 51% employees’ relationships with their colleagues were affected by money worries, and 46% said it influenced their relationship with their line managers.
And with as many as 79% of employees with debt worries losing sleep most nights, and 54% of staff worrying about money experiencing physical symptoms, the cost really does add up.
Source: Employee Financial Wellbeing: Time to do more (2017)
Tackling the Problem
Financial worries persist as a workplace taboo and many businesses remain ambivalent about tackling financial wellbeing. However, on a positive note, the Close Brothers identified 45% of employers who are taking steps to providing some workplace financial wellbeing strategies.
So, as a company, you need to make a conscious decision about your approach to supporting your staff and reducing the costs of this problem.
More businesses are now aware of the need to talk openly about emotional health but few do what they can in terms of addressing the causes. It may not feel like an employer’s responsibility but the business and moral case is clear. Where companies can make available support to reduce stressors then this surely is part of the employment experience. Work is now more than just a place or a set of tasks; it is about nurturing the whole person. When we get people right, we get business right.
We know that many people are in a precarious financial position. And the consensus is clear – it is about financial literacy, or the lack of it. So, making resources available for staff to minimise financial worries has got to be a win-win.
What Companies Need to be Doing
“Financial wellbeing is incredibly personal and affects each of us differently;
not only because of our financial circumstances but also because of our attitude to both money and stress.”
Jeanette Makings, Head of Financial Education at Close Brothers 2019
High-quality financial wellbeing programmes that are easily accessible, well communicated, comprehensive, responsive as well as educational (preventative) are essential. People need the opportunity to explore and address their needs at a personal level.
“Employers and policymakers must act to address the growing financial wellbeing crisis.
Financial education, awareness and understanding are key to making smart, well informed financial decisions.”
Heidi Allan, Head of Insights and Engagement at Neyber 2016
Start the Conversation
Talk about financial wellbeing. Make it the norm. Ask specifically how employees are doing, particularly if they are working remotely, or furloughed. Staying connected is the priority so that people feel they can open up and trust that the response will be positive. It takes courage to ask the questions and even more courage to answer them truthfully so managers need support to have meaningful conversations. Open dialogue is the most likely way to reveal signs of money worries.
According to research by the Close Brothers, employers who have provided resources for financial advice and guidance during the pandemic have proven popular. Around one in five (21%) say they are likely to use it, and this rises to 27% among those aged 25-34 and to 38% between the ages of 35-44.
This is your chance to support your employees in the best way you can.
“You can help them to be proactive about their situation by providing clarity and keeping the dialogue open”.
Help employees understand what is available
Never has there been such change and uncertainty as during the pandemic. So, providing people with facts to reduce emotional arousal and to provide a greater sense of control is vital and something that employers can help with.
Not only do staff need to know what benefits they are entitled to, but they benefit from access to financial wellbeing resources that help to educate and to address money worries. Responding in a personal way to employee needs means you reduce the financial burden and increase engagement. That’s a win-win for everyone.
For further information, advice and support:
Employees might find this helpful:
Employers can check out:
But for real support that makes a difference, contact one of these experts who I highly recommend:
Tony Pound is a financial planner with a difference! He takes a holistic approach to wellbeing and health, providing lunch and learns, and clinics, to educate, coach and advise. Check out his podcast ‘Health, Wealth & Happiness’
Susan Ni Chriodain from Behind The Numbers is a brilliant person for leaders to speak to about getting to grips with finance and having the tricky conversations about where the company is at. You can hear more about her support for leadership in a recorded conversation here.
Liz Maudsley is a financial planner providing financial wellbeing workshops. She is also an ambassador for raising financial awareness for women and speaks at a range of events. Check out how she can help
Lorna Nichol, local director at Metro Bank, a community establishment aiming to make access to banking available for all. Lorna enjoys giving talks at larger Businesses on ways to manage finances and get the best out of your bank, and the bank provides talks for schools on financial education. You can tune into my interview with Lorna to hear her insights, and get in touch with her here
Thank you Lorna for your contribution to this article.
The DNA of Financial Wellbeing 2019/20 Neyber DNA of Financial Wellbeing – the largest research of its kind (neyber.co.uk)
CIPD (2016) Financial well-being needs to become part of well-being at work strategy. Accessed at: http://www2.cipd.co.uk/community/blogs/b/research-blog/archive/2016/08/26/financial-well-being-needs-to-become-part-of-well-being-at-work-strategy
The Bank Workers Charity (2015) Bank on your people. Accessed at: http://www.bwcharity.org.uk/content/bank-your-people
Close Brothers Asset Management: 25 million UK employees affected by money worries while at work | Close Brothers Asset Management (closebrothersam.com)