4.2 million worker days each year are lost in absences because of poor financial wellbeing. Equivalent to £626 million every year. Centre for Economics and Business Research, 2018
Slow wage growth, along with rising costs of food, childcare and housing following covid-19 means that households finances is a worry for many. Research by the Money and Mental Health Policy Institute shows two-thirds of employees that report struggling financially have least one sign of poor mental health that could affect their ability to function at work.
Once seen as a personal matter, employers need to be more aware of the impact that poor financial health amongst staff can impact their organisation. The CIPD’s Employee Financial Wellbeing report, published in 2021, highlights the impact poor finances have on staff sickness, with employees in high financial stress averaging almost 3 more days off work due to sickness than those in low financial stress (6.2 days vs 3.8 days). Absenteeism due to employee finances impacts staff morale and hampers productivity.
To reduce the number of hours lost due to employee financial health, we recommend organisations establishing a financial wellbeing strategy for employees, that into consideration the following areas.
Reduce the cost of employmentOne of the first things an employer can do to support employees is to minimise the cost of working for their organisations as much as possible.
Reducing the cost of travel for employees, whether that is encouraging flexible/home working where possible, or providing subsidised travel, are ways that employers can reduce the financial burden their employees have travelling to work.
Employers should also consider measures that limit the amount of expenses employees incur. Where possible, work-related expenses up front or expensed directly from an organisational account, to avoid employees having their personal finances impacted by payments that are work related.
Tackling stigmaEmployers should work to create an organisational culture that reduces stigma around individuals facing financial difficulties.
Joining awareness campaigns and promoting a better understanding of the causes and challenges around financial wellbeing can work to removing barriers staff members might have in looking for support with the mental health.
Staff trainingCritical Research found that 91% of UK adults aged 18 and over did not access financial advice in the previous year.
Training around debt and financial health should be offered to all staff members as a professional development opportunity. For those with line management responsibility, training on how to use staff members with financial wellbeing should be fully imbedded into inductions and competencies for managers.
Access to supportSignpost employers to the range of different advice sources available to support financial education and well-being. We also advise promoting resources and tools around a broad range of financial topics relevant to employees, such as pensions. With only half of working-age people currently paying into a pension scheme, there are topics that employees would benefit from better financial education around, regardless of income level and personal finances.