Financial wellbeing: understanding the challenges facing your workforce

Money underpins almost everything we do and is a vital part of our everyday lives. Historically, the perception is that financial stress and anxiety occurs as a result of negative behaviours or poor decision making leading to stigma around asking for help. If 2020 has taught us anything, it’s shown us that unexpected things happen and the key is to be as prepared and protected as much as we can.

Our latest report, Employee wellbeing – the changing dynamics of financial health, looks at how the pandemic has affected employees right across the UK, and the impact these challenges are having both inside and outside of the workplace.

Whether employees are struggling to cope with everyday finances, are concerned about mounting debt or lacking a savings buffer to help them with unexpected expenses – money worries are a real concern which has been made worse by the impacts of the Covid-19 pandemic.

There are many ways that financial pressure can impact people. Some of the more common effects include feeling stressed or anxious, while others might feel depressed if situations are ongoing over a period of time, and could even be losing sleep through worry – all of these impact physical and mental health.

The knock-on effects of these concerns are also far reaching. More than two in five people said financial pressure affects their ability to manage their money; make financial decisions; and affects their daily spending – all of which could be further compounding their feeling of anxiety.

So why should employers care? Surely this is a personal issue that doesn’t affect employees in the workplace? Wrong, these issues will be having a significant impact inside many organisations as well as costing companies money in lost productivity.

More than one in four people said financial pressure impacts their behaviour at work and their job performance directly – this is even higher in the younger age groups where almost half of those aged 34 and under said this was the case. Over half of the people surveyed said they felt their employer didn’t care about them and two in five said they didn’t feel their employer valued what they did.

As well as the impacts felt within the workplace, some employees also feel the need to take time off to address their personal problems. That has a direct cost to organisations – for a 10,000 employee firm, that’s estimated to be around £1.6 million per year!

Here we share three key areas that can support any financial wellbeing strategy, no matter what stage of the journey your organisation is at:

Use data to understand the issues and challenges facing your employees – if you don’t know how they are doing and the support they need, you could be spending your money in the wrong areas.
Look at the support you have already – is it meeting the needs of the organisation or are there any gaps? Are you making the most of your existing benefits providers? Have their solutions evolved as many have during 2020? Are there new providers that could support your workforce in different ways?
Communication is key – ensure your messages are tailored to your audience. Are your messages getting through, and are they understood? Is there a need to spend time on knowledge building to realise the reach of the support you offer?

For more on our report findings, join our webinar with Steve Webb in conversation with Heidi Allan and David Millar, who will be discussing the ‘So what?’ of our latest financial wellbeing survey at 11am on 10^th March. Register to join.

The author is Heidi J Allan, senior financial wellbeing consultant at LCP.

This article is provided by LCP.