Time to do more
Our new whitepaper, Employee financial wellbeing - Time to do more, examines why money worries affect more than the individuals in trouble, and what some leading organisations are doing to tackle the issue
In July 2016 a YouGov Shelter report found that more than one in three (37%) of UK households were teetering on the brink of homelessness, unable to pay more than a month’s rent or mortgage if they lost their income.
The much-heralded recovery from the financial crash has seen businesses expand and economic growth return, albeit in a fragile way. Yet many UK citizens have seen little discernible sign of improvement, and millions of families are living from one pay day to the next. This shouldn’t be surprising as, since the economic crisis, real wages have remained almost static whilst the cost of essentials has soared, accounting for a huge slice of people’s income. This has left many families in a precarious financial position where an adverse turn of events could easily tip them into serious debt
At BWC, through our work with the banking community, we witness how financial troubles blight the lives of employees and their families. There is a growing body of evidence backing up our findings that poor financial wellbeing is immensely damaging, impacting on all aspects of people’s health and happiness. There are proven links between poor financial wellbeing and mental health problems. Indeed, 42% of those struggling with debt are on medication to help them manage the stress.
When employees struggle financially there's a major knock-on effect for businesses, affecting employee performance and the bottom line.
What money worries mean for businesses
Recent research has also found that when employees struggle financially there is a major knock-on effect for businesses, affecting employee performance and the bottom line. Indeed, the poor financial wellbeing of employees has been estimated to cost UK employers £120 billion a year in lost productivity. The spill-over of people’s financial concerns into the workplace takes a variety of forms. Neyber found that 70% of the workforce waste a fifth of their working hours worrying about money whilst another study found that 15% of employees struggling financially take time off work. Data on presenteeism associated with poor financial wellbeing is more difficult to access, but it’s reasonable to assume this too is a drain on productivity and business performance.
Clearly there are very good reasons for both businesses and employees to be concerned about financial wellbeing. This is why at BWC we’ve made financial wellbeing one of the four pillars of our wellbeing model – alongside psychological, physical and social wellbeing. But we also feel it’s been greatly underappreciated as a determinant of people’s overall wellbeing. In fact, many wellbeing models, including those of some organisations that treat wellbeing very seriously, omit it completely. We think this is wrong. Excluding the financial domain from the picture doesn’t just oversimplify the complex realities. It means that a key influencer of employee wellbeing, one that impacts all other areas of their lives, is not being adequately addressed.
Mental ill health and stress are among the top five causes of longterm absence from work, and the impact of these conditions in the workplace is on the rise.
Leading the pack in financial wellbeing
Among the third of businesses with financial wellbeing programmes in place, some are doing it really well. Anglian Water and Barclays both have a range of educative and reactive programmes in place that encourage financially responsible behaviours, but also help employees to get back on track when their finances get out of kilter. Importantly, both organisations view financial wellbeing programmes as more than an employee benefit. They see them as a key component in their employee wellbeing strategies. At BWC we’d like to see many more businesses follow their leads and make tackling the financial wellbeing of their workforce a business priority.