How can you help employees anxious about the rising cost of living?

From the highest rate of inflation in 30 years to a 1.25 percentage point increase in national insurance, the current economic backdrop is difficult to say the least.

UK consumers face a perfect storm of higher living costs, which will include inflated energy bills which stand to increase average household expenditure by around £1,000 a year, according to Resolution Foundation.

With Office for National Statistics figures showing that 35% of households in the UK were already going into the red at the end of each month before the pandemic, the number of people struggling with financial hardship looks set to rise dramatically.

In a workplace environment this could spell trouble for employers as well as their employees. So, what steps can be taken to boost financial and consequential mental wellbeing within an organisation? And what help can be given to protect employees and their engagement to perform to the best of their ability?

The workplace impact of poor financial wellbeing

Levels of absenteeism shoot up among employees in financial difficulty, multiple studies suggest.

So for employers, the financial stress caused by the current economic squeeze is likely to lead to more absences linked to mental health problems such as anxiety and depression.

Steven Randle, wellbeing lead at Innovate Healthcare, says: “A salary finance study of UK workers showed that 40% reported financial worries and this group was 8.8 times more likely to have sleepless nights. An increasing number of cases referred into Innovate’s occupational health service with mental health issues are reporting financial distress as a contributory factor.”

Poor financial wellbeing among employees is also likely to have a negative affect on performance, as it’s hard to concentrate on the task in hand if you’re worried about how you’re going to pay your bills or feed your family.

“Worrying about your financial security is not something you can leave at the door when you start work,” Randle adds.

“Symptoms of anxiety such as reduced concentration and poor short-term memory also impact individuals at work, with those with low financial wellbeing 7.6 times more likely not to finish daily tasks.”

Taking a multi-pronged approach

Two of the biggest barriers to improving financial wellbeing are lack of financial education and a culture in which discussing personal finances is seen as taboo.

Normalising financial conversations and providing education on financial management and wellbeing is therefore a cornerstone of any attempt to improve financial wellbeing levels within an organisation – especially when times are hard.

“We are seeing an increased appetite for preventative financial wellbeing measures and financial wellbeing training,” Randle says.

Elsewhere, employee assistance programmes (EAPs) can be a great place for signposting external support services, such as the government’s Money Helper website, as well as providing online counselling services.

“Occupational health services may also have a role in addressing mental health symptoms and recommending adjustments to help employees through a period of crisis,” Randle adds.

And last, but not least, employers keen to promote better financial wellbeing over the next 12 months can take a proactive approach by reviewing and modifying the suite of benefits their employees can access to prioritise those that will help to offset the immediate impact of higher living costs.

The squeeze is happening irrespective, so providing user-friendly budgeting tools is one option, while concrete financial help such as discounts at everyday retailers like supermarkets is also likely to prove increasingly popular, especially as they can add up to savings of several hundred pounds over a year.

Spreading the word

Whatever companies choose to do to help support their workforces through this difficult economic period, it is – as always – vital that employees know what is on offer so they can take advantage of it. Focused communications about solutions and services that will have an immediate and medium-term effect on both employees’ finances and their ability to deal with the related pressure is therefore a critical piece of the puzzle.

To minimise absences due to stress-related illnesses, for example, it’s worth running a campaign in partnership with your EAP provider to highlight the mental health support available. In simple terms, work hard at the challenge now rather than waiting for the issue to manifest itself.

The author is Andrew Woolnough, director EQ HR Solutions

Article provided by EQ HR Solutions