Almost two thirds of businesses are struggling to counter workplace mental health issues related to personal finance and want clarity on how to tackle the problem, research has found.
Employee financial wellbeing is a growing concern for businesses, the research said, and concerns over the impact on performance and productivity raised the need to agree best practice standards to address the problem.
The research, conducted by MetLife UK, found 61 per cent of a panel of 200 HR professionals had noticed an increase in personal financial issues affecting mental health and productivity in the workplace.
Similarly, 64 per cent of senior managers agreed tackling financial stress would boost productivity and company engagement, and more than half said there was a growing momentum to provide support for workers.
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The research echoed the results of the CIPD’s annual wellbeing survey, which found a quarter of HR professionals believed poor financial wellbeing was a significant source of stress in their organisations.
Rachel Suff, senior employment relations advisor at the CIPD, said employers were failing to grasp that positive financial wellbeing contributed to positive mental wellbeing, and only a third of employers actively promoted the concept.
“When asked why they don’t provide programmes to encourage better employee financial wellbeing, the most common response among employers is that they are not sure what they need at this stage, as well as more practical concerns around knowing where to start or how to work out what is needed.”
Duncan Brown, head of HR consulting at the Institute of Employment Studies (IES), told People Management that organisations must look to their HR professionals to build a business case for financial wellbeing and help senior management understand the benefits of taking action.
“A quarter of employees say financial worries affect their performance at work, 8.2 million people in the UK are over-indebted and 30 per cent of us could not survive for more than three months if we lost our job,” he said. “The UK pensions and financial regulators are clear that employers have a responsibility in this area.”
Adrian Matthews, employee benefits director at MetLife UK, said: “There is no magic solution to improving financial wellbeing in the workplace, but a well-designed employee benefits programme is a good place to start. The potential business benefits in terms of more productive employees are clear.”
Yesterday the CIPD released its annual Health and Wellbeing at Work report, which said financial wellbeing was a “relatively neglected” area of organisational policy. It found more than a third (36 per cent) of people professionals did not believe their workers demonstrated the knowledge or skills to make the right rewards and benefits choices for their financial needs.
Almost half (47 per cent) agreed or strongly agreed that their organisations concentrated on communicating to staff what their policies entailed. However, 65 per cent did not believe their organisation regularly consulted employees to see if benefit and reward offerings were meeting their financial needs.
The CIPD report said businesses could tackle the issue by communicating to employees how to get the best from their current benefit schemes, and found businesses that proactively consulted with their employees over financial programmes saw a big jump in their capability to make the right choice.
The private sector led the way, with 22 per cent agreeing their organisation consulted its staff regularly and 29 per cent saying they had the necessary knowledge and skills.
Suff added that employers needed to pay attention to a number of areas to boost financial wellbeing. “These include a fair and equitable pay system, effective retirement planning for people, and good employee communication such as total reward statements for all staff,” she said.