Did you know that financial stress on employees can have a massive impact on workplace productivity? A series of recent studies reveal that financial stress is the number one concern for UK workers, ahead of concerns such as health and the work/life balance. The studies also showed that seventy per cent of the UK’s workforce waste a fifth of their time at work worrying about their finances; this costs the economy around £120 billion per year. Fifty-five per cent of employees said that experiencing financial pressure affects their ability to perform effectively in the workplace, while more than half would value financial assistance from their employer.
Although financial stress can impact all generations, the situation is more serious among younger workers. The majority of the UK’s workforce will be made up of younger generations in the next decade, yet 16% of 18-24 year olds have already defaulted on debt repayments. A poor credit history can now be detrimental to future career aspirations. As a result, eight in ten of 18-24 year olds are now suffering adverse effects of financial worries.
These findings illustrate that financial wellbeing doesn’t only help individual workers; it supports better business performance too. An employee who is not consumed by worry regarding their personal finances will be more focused and productive at work. Additionally, it seems many employers are unaware of the impact financial stress can have on its workforce. When 100 employers in the UK were canvassed for their opinions, a stark disconnect was found between them and their staff. On several measures, including company concern over financial wellbeing and acceptability of managing finances at work, employers had a far healthier picture about the contentment of their workforce than was actually the case. For example, seventy-two per cent of employers thought they provided a good benefits package compared to just twenty-three per cent of employees. Just one in ten employees thought their company cared about their financial wellbeing, compared to the seven in ten employers who thought that employees felt positive about their financial situation.
Financial wellbeing doesn’t only help individual workers; it supports better business performance too. The role for the employer here is not necessarily to increase pay; it’s about how employees can manage that pay, especially across competing short and long-term priorities. If an employee is consumed by financial pressure they are not going be as content as they could be, and a content workforce is most definitely a more productive workforce.
What can be done to remedy this situation? Companies need to address the problem; employees who find themselves under financial strain need to be pointed in the right direction to get the appropriate education or advice they need. Red Star Education is unveiling a new financial education project which will be aimed at companies to give their employees a better understanding of personal finance. This would reduce the risk of losing further workplace productivity hours. The Financial Well-being in the Workplace course is a flexible programme; financial stress can affect individuals in a wide variety of ways, there is not a ‘one size fits all’ approach. Therefore, employees can choose the course topics that are most useful to them, and the course will be facilitated at times that are most convenient to the company.
It’s time for companies to start thinking about how they can reduce the financial stress of their employees; Red Star Education is your partner for all your financial well-being needs. For more information on our workplace initiative feel free to call us on: 01253 486346 or email us: nick@redstareducation.co.uk