17 May Financial Hardship: The Effects on Mental Health
There are many factors which may contribute to the stress levels of your employees, but increasingly, financial hardship is becoming a key reason for employees to experience anxiety. The cost of living is high and goals such as owning a home seem impossible to achieve. For many, they may simply feel that despite working hard in their job, the salary that they take home just isn’t sufficient to support their life outside work. This inevitably leads to a dip in both mental and physical health.
A recent report from Neybar has shown that employees reporting financial related concerns have risen from 58% to 63%. Alongside this, the number of employees with only one month’s salary saved has risen from 24%-32%.
Shockingly, around 33% of families in the UK are just one paycheck away from losing their homes. It is therefore easy to understand why up to 21% of employees say that they are experiencing ‘overwhelming’ levels of financial stress.
The stress and strain of being fraught about finances WILL have a significant impact on an employee’s productivity. Significantly, this will manifest itself in lowering performance, raised absence levels and lesser engagement in the workplace.
Research has shown that:
- Employers facing financial concerns were absent up to 41% more than employees who had no financial concerns
- 20% of employees reported that they were losing sleep over their financial situation
- 10% said they were unable to focus when at work due to the stresses they felt they were under
Increased absenteeism from staff will have an impact on the productivity of teams and on the morale of the staff who are required to cover for absent staff. Relationships between staff may be a causality of these increased stress levels. Anxious staff able to attend work may, however, be more prone to accidents in the workplace and stress-related illness. Ultimately, these staff are may become a high turnover risk.
It has been estimated that the likely cost to business each year is in the region of £120 billion due to decreasing productivity, increasing absence and higher turnover of staff.
So what can businesses do to support their staff?
Early intervention is key. Knowing your staff and noticing a decrease in productivity or an increase in absence may help you to flag up the need for intervention. Employers have a vested interest in helping employees to deal with financial stresses.
There is no ‘one size fits all’ solution to tackling financial anxiety amongst the workforce. Developing a financial wellness initiative would be a good first step and could be tailored to suit your business and your employees. This initiative may be based around educating employees about how to manage their finances more effectively through online courses to help with budgeting or it may offer more practical help on how to deal with pressing debts. For some, it may be more focused on employee’s financial wellness goals and how they would like to secure their future financial security.
Here at Altum HR, we are ready and waiting to help you develop your financial wellness initiative today. Get in touch for a free consultation to find out how.