Mental health in the workplace: the case for financial education
This has been brought into focus by the Stevenson/Farmer review of mental health in the workplace published in October 2017. The report, Thriving at Work, clearly portrayed the impact mental health issues are having on UK employers, and estimated that poor mental health costs employers between £33 billion and £42 billion a year, with an annual cost to the UK economy of between £74 billion and £99 billion.
Earlier research released in May 2017 found a clear link between financial worries and mental health. This report by the Money and Mental Health Policy Institute found that 45% of UK employees report at least one sign of poor mental health, but those with money worries are 50% more likely to say that their mental health is affecting their performance at work.
The research found that financial strain has a graduated impact on employee wellbeing and, as a result, productivity:
- Financially comfortable – 41% employees reported at least one sign of poor mental health.
- Just about managing (so called ‘JAMS’) – 51% of employees reported at least one sign of poor mental health.
- Financial difficulty – 67% employees reported at least one sign of poor mental health.
It might not be a surprise that people in financial difficulty might have sleepless nights, feelings of depression, increased reliance on alcohol, etc., but the impact that money issues have on the remaining workforce should be a major concern. Resolution Foundation estimates ‘JAMS’ to be about 6 million households, about a third of the UK’s working population.
This all points to the fragile nature of the UK ‘domestic’ economy. Nearly 17 million working age people have savings of less than £100. As a result, a fairly insignificant car repair bill or the need to replace a washing machine could push them into debt.
Many of the issues that employees face relate directly to a poor understanding of ‘finances’: how to budget, compound interest, savings and investment, taxation, good debt vs bad debt, how mortgages work, pension freedoms, etc. Although there is now some movement to include these topics in the school curriculum, this won’t help the current UK workforce in their struggles to understand and manage money.
There is, therefore, a growing emphasis on employer-provided financial education as part of a company’s health and wellbeing strategy. For some time, employers have been encouraged to provide Employee Assistance Programmes/helplines to deal with employee mental health and stress; these often include financial assistance and counselling, but are by nature ‘reactive’ – the employee is already in crisis at the time of reaching out for help.
Financial education programmes take a ‘proactive’ approach to the issue, potentially tackling pitfalls and misunderstandings before they become problems and equipping employees with knowledge and skills to help them manage their finances successfully.
There is a compelling case for employers to take the initiative in this area. By providing targeted financial education and practical financial guidance, employers can help their employees dramatically reduce the impact of money worries and, in turn, improve mental health in the workplace.
The Money and Mental Health research demonstrates a clear correlation between concerns about money and mental health. As a result, any employer action to develop financial resilience and alleviate problem debts will play a role in preventing employee mental health problems, reduce absenteeism and presenteeism, thereby increasing productivity.
Ed Watling, head of health & wellbeing benefits at Mattioli Woods, commented: "Various reports have now established a clear link between “wealth” and “health”. Common sense tells us that if an employee has a serious illness, this will affect their ability to manage their finances and, likewise, serious financial difficulties lead to increased stress, mental health issues and absenteeism in the workplace."
"Financial wellbeing not only affects individual workers but also impacts business productivity and performance. This provides a compelling case for employers to take steps to improve their workers’ financial wellbeing and in return their businesses’ bottom line," he said.
Adrian Firth, employee benefits consultant, said: “We help UK employees with their personal finances by helping them take that important first step; the majority will naturally go on to take the second, third and many more. This type of guidance is key, and whilst I’m a big fan of a selection of electronic, web and app based solutions, the overwhelming difference comes from face to face interaction. All you need is a meeting room, a group of employees and an interactive engaging experience – the result is wealthier, healthier and engaged employees.”
This article was provided by Mattioli Woods.
