Lloyd’s bank recently released its ‘The M Word’ campaign to highlight a common challenge faced by staff – personal finances. Money worries are not a new thing, but as evidence mounts that they impact productivity and the bottom line, businesses are increasingly looking to support staff with managing their money. That requires an understanding of the issue – which can be complex.
The challenge of money worries
For employers, acknowledging that their employees may have money worries can be a difficult first step. The ‘we pay our employees enough’ mentality is still around in many board rooms while the incorrect assumption that high-earners have money worries also does not help. Research undertaken by Salary Finance shows that 49 per cent of people earning between £10-£15k per annum had money worries. While this result would be expected for those earning this salary, the results were exactly the same for those earning over £100k as well. So while the concerns of high-earners may be different, but they are still there.
This alludes to another problem with money worries – identifying who may be suffering from them. The assumption is that it is those on low pay, but the Nuffield Foundation point out that those on low pay may be 2nd or even 3rd earners within a household and the London School of Economics suggest that problems may be hidden behind salaries that may not be low but are simply stretched too far.
The impact on staff
It’s clear that money worries are a broader issue than just salary and it can be difficult to identify those suffering in the business. However, the impact on staff is becoming clear. Employees say that a loss of sleep, reduced productivity and strained working relationships can result from financial worries. While the resulting impact of these problems have on the workplace can be difficult to measure, it’s unlikely they will lead to a positive outcome.
Undoing the taboo
Before any practical steps can be taken to support an employee facing financial stress, HR first needs to make the topic of finance more approachable. This goes beyond just having conversations and require businesses to think more broadly. Government statistics show that around half of adults in the UK have numeracy skills equivalent to that expected of primary school children, meaning dealing with numbers can immediately be a challenge to many employees. Therefore, businesses need to begin with the basics and work from there.
After giving the foundation to staff, there then is the challenge of who employees can speak with. Complicated messages are still often better delivered in person, but at the same time, the company can hardly hold a seminar on money worries and expect people to turn up voluntarily. Despite what employers think, the concerns are usually when employees have to speak with HR or line managers.
To overcome this, companies need to provide broad, persistent resources, available to all, accessible in private and supported with more acute services and provisions. Ensure work is undertaken company-wide and advertised to all. Involve senior management and HR teams. Make people feel secure that they are not being singled out.
How to help
If companies empower people to think about money, capture their interest and capitalise on their engagement, they then need to establish a co-ordinated solution.
Education should be the priority, empowering employees to better understand how their finances can be managed more effectively. That may include improving general numeracy, which will undoubtedly have positive impacts on your business, but also looking to speak to people about real-world outcomes, not policy technicalities.
The business can help people manage their day-to-day money using online tools and help generate budgets with subsidised gym memberships, retail discounts, season ticket loans or cycle-to-work schemes. In the future, technology will likely link these benefits together more effectively to make the process even easier.
Thinking more creatively, businesses may want to consider providing a broad financial guidance and advice functions designed to help at all stages of an employee’s career such as family protection of saving for university fees. This can be achieved by bringing together appropriate resources, be they provided free by the government, those offered by a product provider or bespoke regulated advice. In doing so, these strategies may use an employee’s life cover or medical insurance so it is important that the individual knows how these will be affected before they commit.
Ultimately, bringing all forms of financial wellness things together should be the aim, ideally using technology that makes everything available to everyone at all times, in the palm of their hand or on the go.
Helping with money worries can be hard and may require a change in the outlook of the company, challenging internal assumptions and investing in education. These things will not instantly add to the bottom line but equally don’t need to a significant investment in order to see a healthier, happier workforce.
Bringing everything together may take time but as financial stress continues to be a regular issue for employees and it is unlikely to become less of an issue anytime soon. Start now by getting a plan together and doing something proactive – employees will be grateful something’s happening.
- John Deacon: How to empower your workforce the right way - Thursday, December 5, 2019
- John Deacon: Money talks, getting staff talking about financial stress - Monday, September 9, 2019
- John Deacon: Pensions or housing – it shouldn’t have to be a choice - Tuesday, July 23, 2019