BLOG ARTICLE | By The Simplyhealth Team
|BLOG ARTICLE|||||By The Simplyhealth Team||16 December 2020|
There is a clear two-way relationship between money worries and mental health. This relationship can be particularly apparent at this time of year. Overspending on festive celebrations and the long wait until January’s payday take their toll on bank balances and heighten financial worries.
Plus this year, many people will also be experiencing additional financial concerns caused by the pandemic. The impact of the furlough scheme, redundancies and job losses due to business closures, coupled with ongoing economic uncertainty creates very real worries that affect lives in and out of work.
Financial concerns can put a real strain on our mental health. It can increase our stress levels and impact our ability to make decisions or focus on tasks. More significantly it also triggers more serious mental health conditions such as anxiety and depression.
Research reveals a stark fragility around financial wellbeing. A Willis Towers Watson report published in early 2020 found that over a third of employees live paycheck to paycheck, and worryingly, 31% have financial problems that are negatively impacting their life1. And a BITC report revealed that 34% feel that their financial situation negatively affects their mental health2.
Employees who are experiencing financial worries may find it hard to focus, and won’t be as engaged in their work as a result. It will undoubtedly also lead to feelings of stress, which can mean employees are more likely to take time off work.
Stress is a leading cause of both short- and long-term absence; identified by 38% and 46% of organisations respectively3. Furthermore, financial concerns are reported as a main cause of stress at work by 8% of respondents in the CIPD report3, with absenteeism being one of the main impacts leading to 1.63 million employees taking time off work4.
Employers are well-placed to take action on financial wellbeing. And it starts with ensuring that your organisation has a robust strategy in place for supporting financial wellbeing, integrating it into your wider health and wellbeing policies.
Encouragingly, our workplace wellbeing research with the CIPD found that 43% of organisations design their wellbeing activity to promote financial wellbeing to a large or moderate extent. But financial wellbeing is still the poor relation in many wellbeing strategies, with almost one quarter not taking it into account at all3.
There are five key areas that employers can focus on within their financial wellbeing strategy to help their people create and stick to a budget, keep track of spending and meet financial commitments:
1. Identify underlying causes: Help employees address the root of any financial issues. As different age groups have different financial priorities, a good starting point is to break the workforce down into segments.
2. Offer relevant support: Younger employees might find it useful to have matched savings in lieu of pension to pay off student loans or help with first home costs. Older employees preparing for retirement might need support with topping up their pension savings and adjusting budgets.
3. Encourage openness: Only 36% of employees feel comfortable talking about financial difficulties at work2. As you would with mental health, make it okay to talk about financial concerns, encouraging leaders across the organisation to share their own stories.
4. Communicate regularly: Make sure employees know what help is available to them through pay advances, hardship loans, travel loans, Employee Assistance Programmes, Save As You Earn schemes or financial education programmes. Even just reminding employees to make the best use of their employee discounts can help.
5. Provide effective signposts: Ensure line managers are fully equipped to help any employees who are struggling financially. Direct them towards Employee Assistance Programmes or external agencies such as the Money Advice Service, Step Change and Citizens Advice.
For more on supporting your employees’ finances, throughout the post-Christmas period and beyond, we have created a guide to financial wellbeing, highlighting all the key statistics from our latest research with the CIPD: Download the guide now.