Employee financial worries are costing employers an estimated £15.2bn every year in higher turnover, lost productivity and increased absence, according to research.
The study by financial wellbeing provider Neyber, which explored the spending habits and attitudes of more than 11,000 employees and 720 employers, found money worries were a significant stressor for UK employees in 2019, with 29 per cent citing this as their top concern, followed by retirement and work-life balance at 27 per cent.
The research found three in five (62 per cent) employees were affected by money worries – a figure that translates into more than 20 million British workers across all income groups.
- Most employees now affected by money worries at work, survey finds
- How responsible are companies for employees’ financial wellbeing?
- Homelessness a ‘major issue’ for employers, new figures suggest
The report suggested that financial worries cost employers more than £14bn in staff turnover – with 3.6 million employees looking for a new job to cope with money issues – and £516m in lost productivity as many people struggle to focus at work because of the stress caused. The study also found employees take on average 2.5 days off because of money worries, which could be costing UK businesses as much as £478m.
Monica Kalia, chief strategy officer and co-founder of Neyber, said addressing financial worries benefits both employees and employers. “Providing support relevant to the differing needs of employees is important,” Kalia said. “Financial wellbeing is not just about paying off debt, but ensuring employees feel in control and confident about their future as well.”
According to the study, almost three-quarters (73 per cent) of businesses have a financial wellbeing strategy for staff, up from 64 per cent in 2018. However, just two in five (40 per cent) feel their strategy is ‘well developed’, and only 4 per cent include employee financial wellbeing as a top HR priority.
Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter
Speaking to People Management, Rachel Suff, senior policy adviser for employee relations at the CIPD, said the Neyber research “paints a more positive picture” than she would have expected in terms of organisations’ general awareness of, and willingness to take action on, this issue.
“When we published our annual Health and wellbeing at work research, we found most organisations have a poor relationship with financial wellbeing,” Suff said.
“We also did a CIPD update poll a couple weeks ago on it because, at this time of year, there’s a huge financial pressure, and the majority said their organisation did not provide any kind of financial coaching or advice.”
Suff said focus on this area is lacking, with the Neyber research crystallising its importance for employers. She said it was vital organisations include it in their approach to wellbeing to drive organisational success and productivity.
Like Suff, Peter Reeve, chair of the Charities HR Network, was surprised by the number of businesses apparently taking financial wellbeing seriously. “In our network, we talked about what people are doing on this, and the reaction was that it was something employers know is an issue and they should be aware of, but it was hard to nail down exactly what they should be doing to help,” Reeve said.
He added that HR teams and line managers can take the first steps to tackling the issue by having meaningful conversations with staff. By doing this, HR can start to measure the impact that poor financial wellbeing has on employees and the wider organisation, Reeve said.
“HR has a critical role to play in terms of trying to produce data for the business to enable it to focus on financial wellbeing in a sensible, practical way,” he said. “HR tends to be the gatekeeper of things like employee and wellbeing surveys, as well as employee assistance programmes, which can help give meaningful information to managers and others [so they can] talk to staff who are struggling.”
A simple way HR can take action is by improving internal communications and education around employee benefits, reward and pay, added Suff. She said many people “pull the wool over [employees’ and consumers’] eyes” when it comes to financial matters such as retirement and savings, so HR has a responsibility to help staff become more financially literate.