Your financial responsibility towards the people working for you shouldn’t stop with their wages or salary payment.
Many people are in debt and are unable to save. They are struggling to pay mortgages or rent and to feed and clothe their families. Studies over the years have come up with statistics such as: 40 per cent of adults say they are not in control of their finances; only 28 per cent of people have a savings buffer equal to three months’ income and a third of employees state financial worries are their biggest concern.
Negative impacts in the workplace
When people are struggling financially, they always hope for more income. They try to find an extra job. They volunteer for some overtime, or hope to get a pay rise. This is all so that they can pay their bills and feed their families. Many people have more than one job or work overtime, so they can bring in a bit more money.
All of this will inevitably have a negative impact on the health of your employees. It will give them higher stress and anxiety levels and affect their ability to sleep, their concentration levels and their absence due to sickness. If they are suffering, then your business is also suffering. They will not be performing well. Their decision making will be affected. They will have a reduced ability to concentrate and there will be an impact on productivity.
How can an employer help?
As an employer, you are already helping them by paying a salary. But is there more you can and should be doing? And does their salary cover their bills? More income is one solution, but a sustainable upturn in someone’s financial situation might be more about reducing debt and outgoings and increasing the savings buffer.
Larger employees can (and often do) provide access to savings schemes They can provide car loans, childcare vouchers, help with buying a cycle for someone to travel to work, or help with public transport costs or parking. The list of benefits goes on…
As a smaller employer, you could start by setting up an employee financial wellbeing strategy. This does not have to be difficult. It would be a good start to look at all the help you already provide and put it all into an easily accessible package. You probably provide help already, but not in a clear and easily accessed format.
You can also signpost employees to help which is available for them – usually at no cost. There are all kinds of support mechanisms, debt counselling, financial guidance, pension advice, savings schemes, etc which is available if employees know where to look.
Have you thought about providing access to a financial helpline? Or paying for debt counselling? Or paying for advice for your workers, either as a group or individually? This does not need to cost you a huge amount. It can be as simple as helping provide a signpost for people to find the help they need.
Sometimes all that is needed is some financial education. People are frightened of managing their finances because they feel they don’t have the skills or knowledge. Even if someone has a relatively large salary, it may not mean they are financially secure. If their outgoings are only just covered, then they may also be concerned about increased interest rates, increased inflation, higher energy costs. Housing prices are coming down, so they may be facing negative equity or increased rent payments.
The benefits for the Employer
A small investment by you as an employer could pay you dividends. If people are not so stressed about money, then they will be more productive. If people do not need to work silly hours to earn a little bit of overtime, or work at more than one job to make ends meet, then they will be far more productive for you. You may also see a reduction in sickness absence caused by stress and anxiety. Providing some financial support and advice for your workers will also bring loyalty from workers. It may also bring you a little more trust on their part. If they can see that you really care about them and their families, they will be more likely to “go the extra mile” for you. It cannot do your reputation as an employer any harm, either.
Employers are more likely to support the physical health and wellbeing of their employees, but few tackle the financial causes of stress, anxiety and related sickness. There has been a huge focus on pension schemes, but this is only part of the solution. A caring employer who wants to benefit from a healthy, happy and productive workforce should be thinking about what other financial advice and support they can offer.