Our whitepaper, Employee financial wellbeing - Time to do more, considers the ways that concerns about money prey on people's wellbeing and looks at the implications for businesses when their employees are in financial difficulty.
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. And through our work with the banking community, we witness how financial problems affect the lives of employees and their families. Alongside this there is a growing body of evidence backing up our findings that poor financial wellbeing has a damaging impact on all aspects of a person's health and happiness. And there are proven links between poor financial wellbeing and mental health problems. Indeed, 42% of those with debt are on medication to help them manage the stress that this causes.
When employees struggle financially there's a knock-on effect for businesses, affecting employee performance and the bottom line.
What this means for businesses
Research suggests that when employees are facing financial difficulty there is a 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 those affected take time off work.
Clearly there are good reasons for both businesses and employees to be concerned about financial wellbeing. This is why we’ve made financial wellbeing one of the four pillars of our wellbeing model – alongside psychological, physical and social. 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.