Money worries are impacting more than three-quarters (77 per cent) of employees at work, research has found, with a disastrous knock-on effect for productivity.
The inaugural Close Brothers Financial Wellbeing Index, which polled 5,000 UK employees, found two in five (39 per cent) worried about money always or often, with younger workers the most affected.
Jeanette Makings, head of financial education at Close Brothers, said the problem was a “bottom line issue” that businesses needed to start acting on.
“If an employee is worried about money, they don’t park that worry in the umbrella stand at the door. It impacts their decision-making functionality, and they might use work hours to take care of issues, or take time off work. It starts to impact their overall health,” she said.
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“All those factors and more mean businesses are not getting the best from their employees. This is a bottom-line issue [and] doing nothing is no longer an option.”
The research found 87 per cent of millennials and 72 per cent of employees aged between 35-54 reported being affected. Those over the age of 55 were least likely to suffer, with 47 per cent reporting they were affected by money worries.
The survey, which also polled more than 1,000 employers, found businesses “dramatically overestimate” employee financial wellbeing, despite 22 per cent noting reduced productivity as a result of money-related stress.
Other impacts included loss of talent (22 per cent), higher short-term and long-term absences (both 19 per cent), reduction in retirees (17 per cent) and higher healthcare costs (13 per cent).
Only 45 per cent of employers surveyed provided finance-specific support. In addition to salary and pensions, the top benefits employees were offered to help improve their financial wellbeing were discount vouchers for lifestyle expenditure, financial advice, retirement seminars and workplace loans.
“Despite the growing awareness of the need for workplace financial wellbeing, organisations seem to be struggling to find clarity, transparency and meaningful measurement on this issue,” said Makings. She said businesses were well placed to improve employees’ financial wellbeing, as they were able to provide better value for money on benefits than an individual and could distribute financial education, advice and investment solutions.
Responding to the report, CIPD president Professor Sir Cary Cooper said: “Although many businesses have made great strides to look after the mental wellbeing of their employees over the last decade, not as many employers have supported their financial wellbeing. And given that employees have said their money worries are affecting them at work, this is a bottom-line issue.”
Cooper, who is professor of organisational psychology and health at Alliance Manchester Business School, added providing advice and support for employees on personal financial issues was “not only the right thing to do, but could also deliver enhanced performance at work by taking away the money worries that can be a distraction from the daily work.”
Previous CIPD research found physical fatigue caused by lost sleep worrying about money was the most common reason why financial concerns impacted individuals’ productivity.