Are employees' Christmas debt hangovers more serious than you think?
In some cases, festive overspending leaves employees with serious money worries. A study by Willis Towers Watson found that 78% of those struggling with financial worries said they suffered above-average levels of stress. As a result, they are more likely to take time off work. A study by the Social Market Foundation and Neyber found that one in 20 people have missed work over the past year because of money worries. It calculated that financial concerns were responsible for a total of five million lost working days a year.
Some employees are reluctant to take time off due to stress, because they are worried about missing out on wages or losing their job altogether, compounding their financial issues. Instead, they show up distracted and disengaged. The Willis Towers Watson research found that employees with money worries were the least engaged in the workplace.
This in turn has an impact on their productivity. A study at the University of Warwick, published in Science in 2013 asked people to think about money concerns and then set them unrelated spatial and reasoning tasks. It found that their performance deteriorated in the same way as it would if they were sleep-deprived. Barclays has estimated that the lost productivity caused by financial distress impacts the bottom line by 4%.
Financial stress after Christmas isn't just a problem for employees, it also causes a number of headaches for employers. The first challenge for HR managers is to identify where money worries are at the root of stress, absence and poor productivity, and ensure employees can access the help and advice they need to address their financial problems.
In some cases this help is offered through the workplace, but employers don't necessarily have to commit to a significant investment in order to tackle the impact of money worries on staff. Where employees are concerned about debts, they can be directed to charities offering debt advice, such as Citizens Advice and StepChange. Alternatively, their employee assistance programme may offer telephone counselling, which can cover specialist financial advice. Employee Assistance Programmes are often offered as a core component of health cash plans.
Signposting staff to advice and support is invaluable, but this is just one part of a robust and effective financial wellbeing strategy. If employers are to eradicate money worries in the workplace, they need a multi-pronged approach that addresses employees' practical needs over the short and long term, as well as equipping them to make better financial decisions in future.
Download our latest report 'The importance of addressing financial worries in the workplace' to find out what employers can do to support employees