Almost seven in 10 employees are engulfed in money worries at work despite employers dedicating more resources to financial wellbeing, a report has warned.
The poll of 5,000 UK employees and 600 senior HR professionals, conducted by Wagestream, revealed 68 per cent of employees were hiding financially driven mental health concerns from their employer due to embarrassment and fear of being reprimanded.
The report also found that a quarter (24 per cent) of UK employees were concerned about money every day – an 8 percentage point increase on the previous year – making money the number one worry overall in 2021.
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Despite significant employer efforts to introduce financial wellbeing programmes – 93 per cent of HR professionals said their organisation now has a financial wellbeing strategy, up from just 51 per cent in March 2021 – the report warned of an “alarming disconnect between the support employees need and what their employers plan to provide”.
While nine in 10 (91 per cent) HR professionals said they believed they supported their workforce’s financial wellbeing, just half (52 per cent) of employees felt the same.
The report suggested this divide could partially be attributed to factors like poor communications around support awareness in the workplace. For example, three in 10 (28 per cent) HR professionals said they offered salary advances, however just 9 per cent of employees said their employer provided this.
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The research comes amid a growing cost of living crisis, with the latest official labour market figures showing that wages are still not keeping up with inflation.
Figures released on Tuesday (15 March) by the Office for National Statistics showed that growth in regular pay excluding bonuses was 3.8 per cent in the three months to January 2022. However, when adjusted for inflation, this fell to negative 1.0 per cent.
To add to this mix of concern, the report has identified that the “perfect storm” has left UK employees vulnerable, with the rise in money worries coinciding with an increase in low financial resilience (which is triggered by negative life events) that affect the ability of people to tackle financial shocks.
For example, in October 2020, 14.2 million UK adults had low financial resilience, marking a 3.5 million rise since the start of the pandemic in March the same year, which back-pedalled a three-year downward trend.
Charles Cotton, senior reward and performance adviser at the CIPD, said in-work poverty was a major issue before the current cost of living crisis, and was “now likely to get worse”. However, there are a range of steps employers can take to improve their people's financial wellbeing.
“Firstly, [employers] should pay a fair and liveable wage to help people achieve a decent standard of living,” said Cotton. Supporting in-work progression – which gives employees the ability to increase their earnings potential – and offering financial wellbeing support to encourage people to be open about their money worries could also benefit employees, he said.
Paul Day, senior support officer at charity CABA, urged employers to act “sensitively, compassionately and confidentially” when supporting employees with their financial wellbeing.
While there is “a wealth of free resources” to help organisations support their workers’ financial wellbeing, Day also suggested employers could look into providing group income protection insurance or group life insurance.
“Depending on their industry, they could even do something as simple as asking local businesses, like restaurants or gyms, if they happen to offer discounts for employees to enjoy,” he added.
The CIPD recently released guidance for employers looking to tackle in-work poverty.