Half of employers do not have a financial wellbeing policy in place to support their workforces, research from the CIPD has found.
A poll of 420 employers found 49 per cent did not have a policy on financial wellbeing, increasing to 64 per cent among lower-paid sectors including retail, hospitality and leisure, catering and cleaning.
Employers in these sectors were also most likely to say they thought their employees’ finances had been adversely affected by the pandemic.
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Similarly, less than half (46 per cent) of the employers polled said they had explored how the pandemic had impacted their staff financially, or plan to do so by the end of this month.
Just one in 10 (12 per cent) of employers said the pandemic had led them to introduce or plan to introduce a financial wellbeing policy.
The CIPD has urged all large businesses to have a financial wellbeing policy in place, which can include signposting employees to independent money and debt guidance, offering access to low-interest loans and running pension workshops.
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Charles Cotton, senior performance and reward adviser at the CIPD, said that while many employers have stepped up to support their employees’ mental health through the crisis, the same attention needs to be given to financial wellbeing. “For too long it’s been considered the poor relation to wellbeing but we know the two are intrinsically linked and should have parity,” he said.
“While we fully acknowledge how tough it is for businesses right now, with many just focusing on surviving, we think there’s a strong case for employers to be doing more to support their people’s financial wellbeing.
“It may well be that even light-touch steps, such as signposting to independent money and debt advice, can start to make a difference.”
Sarah Murphy, associate director of advice, information and training at Mental Health UK, said mental health and money problems are often linked. “With people feeling the economic shock waves of the pandemic, it’s more important than ever that employers recognise how money problems can impact on mental health,” she said.
Murphy added employees could often feel ashamed or embarrassed by financial problems, which could be a barrier to seeing help and “creates a vicious cycle where someone’s money problems can get worse, and so does their avoidance of the problem”.
She said: “Employers can take simple steps to support their staff in this area, such as providing information on payslips to highlight where their staff can get help for their money problems, or arranging for a financial expert to come and speak at a team meeting.”
The CIPD research found a number of reasons why employers did not have financial wellbeing policies. More than a quarter (27 per cent) said their management did not have the time, money or expertise to create a policy, while a fifth (21 per cent) said they were unsure what employees would want in such a policy.
A similar percentage (20 per cent) questioned whether a policy would actually contribute to their employees’ financial wellbeing, while 19 per cent did not trust that a policy would improve their organisation’s performance.
Martin Parish, workplace pensions and financial wellbeing lead at Aon, said that while finances were ultimately for individuals to handle, employers did have a role in “building positive behaviours towards finances”.
"Employees of all ages are faced with increasingly challenging situations – complex retirement decisions, getting on the property ladder, managing debt – all of which means support from employers can help people to get on top of these,” he said.
Sue Anderson, head of media at debt charity StepChange, said for the first six months of the pandemic last year, 44 per cent of individuals coming to the charity for help were in employment.
“It’s evident that some are still struggling with their debts while in work,” she said. “In the wake of a devastating pandemic for people’s finances, employers need to step up and ensure that staff financial wellbeing is a priority.”