This year has seen our cost-of-living soaring, with rising energy costs, increasing food and essentials prices and greater interest rates for mortgages and higher rental costs; it’s a difficult time for many as we see our budgets squeezed.
Even before the current pressure on our cost of living, one in four employees say money worries have affected their ability to do their work. With one in eight UK workers already living in poverty- many more are now likely to be struggling to maintain their quality of living; even those on higher salaries are not immune.
As an employer, you can make a difference in supporting the financial well-being of your workforce over the coming year.
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What’s the business case for having a financial well-being plan?
Financial well-being is an integral part of an employee well-being strategy, creating a healthy and supportive workplace where individuals can be the best that they can be and perform to their best.
Evidence from the Center for Evidence-Based Management (CEBMa) clearly links financial well-being to both employee well-being and individual and business performance. This research consistently shows that financial distress has a direct impact on health outcomes, particularly stress-related issues, which can impact performance and absenteeism.
Financial distress can lead to a vicious circle of mental and physical health issues that affect an employee’s ability to work and impact their earnings, exacerbating their financial distress.
Those experiencing financial distress are more likely to be absent from work, perhaps needing time off to handle their financial issues or stress-related illnesses or emotional distress. The impact of this on your business affects performance. When employees are absent from work, businesses suffer losses to both productivity and finances because, in many instances, replacements must be hired and work is not completed as planned.
Alternatively, financial distress can lead to presenteeism, where employees attend work but don’t perform to their usual standard either because of distraction or health issues such as stress, both of which can have a significant impact on productivity.
There’s a clear business case for supporting our employees with their financial well-being, but also a moral one – we have a responsibility to our employees to support them with their challenges and to be the best that they can be.
What can you do?
To make a difference to those in financial distress and to improve the financial well-being of others, having a simple, supportive, policy is a great place to start:
- Normalise conversations about money worries, making your workplace a safe place to discuss personal issues
- Ensure that you promote and communicate any employee benefits you have that could help and how to make the most of them
- Signpost your employees to supportive initiatives for money and debt issues if they are in financial distress
If you want to go further, you can develop a financial well-being plan that could include initiatives such as:
- employee benefits that reduce living costs
- financial education programme
- access to debt counselling for those who need it
We can support you in developing a tailored financial well-being or well-being strategy to support the employees within your business – call our team today.