One in four (25 per cent) employees are suffering with financial problems that are so severe that they are affecting their performance in the workplace, new figures have revealed.
Surprisingly, this issue isn’t only affecting low earners, according to the research; one in five (20 per cent) of those earning between £45,000 and £59,999 said financial anxiety affects their ability to do their job, too.
Nearly one third (32 per cent) of the 1,817 employees surveyed by the CIPD and Close Brothers Asset Management didn’t cite receiving a higher wage as one of the top five solutions to their financial concerns. This illustrates that by simply increasing staff’s wages, employers may not be tackling the issue in the most effective way, said the report.
Employers need to do more to promote financial wellbeing by offering support to staff, said the report, because financial worries can have a profound affect on employees’ health and productivity.
Charles Cotton, reward and performance adviser at the CIPD, said: “Money worries affect people regardless of their age, gender or level of pay and, with one in four admitting it negatively impacts their work, it’s clear that organisations should be focusing on financial wellbeing as part of their workplace agenda.
“This will become increasingly important over the next 18 months, as rising inflation is likely to lead to a pay squeeze and increased concerns about personal finances.”
The report offers suggestions on how employers can support staff who may have financial concerns. Solutions that were rated as effective by the employees surveyed included being rewarded in a fair and consistent manner (41 per cent), being able to save for the future through a pension (26 per cent) and being able to develop and progress in their career (20 per cent).
The report suggests that different demographics in the UK workforce may benefit from different levels of support; the number of employees reporting problems with financial worries rose to almost a third (31 per cent) among 18 to 24-year-olds, and those living in London (32 cent).
Employees in Wales were found to be more likely to rate being able to comfortably pay off existing debts as an important aspect of their financial wellbeing, with more than half (55 per cent) citing this option compared with a UK-wide figure of 45 per cent. Nearly two-thirds (60 per cent) of respondents in London said they valued being able to save for the future, compared to just 38 per cent of the workers nationwide.
Women are also more likely than men to report that their concerns about money are affecting their work; 28 per cent of women said money worries impacted on their work, compared with 23 per cent of men.
Nearly one-fifth (19 per cent) of respondents said they have experienced physical fatigue caused by losing sleep over money worries, which went on to affect their workplace performance. Around a third (30 per cent) of respondents who work in the public sector said money concerns have affected their job performance.
“Businesses need to consider the impact financial worries are having on employees’ health, happiness and productivity and look at what they can do to help reduce stress levels,” said Cotton. “It is a sensitive issue, and employers need to recognise that employees may be cautious about discussing their financial circumstances with their colleagues, but getting the system right will ultimately benefit everybody involved.”
He recommended that employers create a well-rounded reward strategy that “recognises this” and is flexible enough to meet the diverse needs of each employee.
Jeanette Makings, head of financial education at Close Brothers Asset Management, added: “Money worries now weigh heavily on a huge number of employees across the country, impacting their performance in the workplace, so it is more important than ever that employers recognise the role they can play in helping staff to understand and improve their financial wellbeing. Equipping staff with the tools they need to take control of their finances now and for their future will not only improve their own wellbeing, it has been proven to boost productivity levels.”