Reassuring employees in times of economic uncertainty
The economic climate
In a survey of over 10,000 UK employees by the fintech start-up Neyber, a massive 7 in 10 say they are worried about money1.
It comes as little surprise that people have concerns about their personal finances. The financial crisis of 2008 and subsequent global recession led to job losses and pay freezes across many industry sectors. These were coupled with a lack of affordable credit and continued increases in the cost of living.
But this survey was carried out before the majority of the UK population voted to leave the European Union on 23 June. On 24 June pound sterling dropped to its lowest level since 1985, the financial markets went into freefall and the Prime Minister resigned.
In the initial aftermath of the Referendum vote, the Bank of England has sought to "dampen shocks and help firms and households to seize opportunities associated with the UK's new relationships with Europe and the world"2.
This includes enabling banks to have greater flexibility in supplying credit to UK households and firms. Nevertheless the UK has "entered a period of uncertainty and significant economic adjustment", according to Mark Carney, the governor of The Bank of England.
A cut in interest rates by a quarter of a percent to 0.25% has sought to kick-start the UK economy but the future potential of the economy and its implications for jobs, real wages and wealth are not the gifts of the Bank of England. This will be driven by major decisions made by others in the public and private sectors.
Employers need to ease the fears of their employees
It's a testing time for employers. But it's also a testing time for employees. And just as the Bank of England governor Mark Carney has tried to ease fears of the financial markets, so too will employers need to ease the fears of their workforces.
A number of organisations - including Lloyds Banking Group, Rolls Royce and the NHS - have sought to reassure their employees that business will continue as usual for the moment, at least.
It will be crucial for employers in general to take this kind of approach and provide support to their workforces who may feel anxious about their jobs, their personal finances and even their eligibility to remain in the country. Despite the UK's vote to leave the EU, GlaxoSmithKline (GSK), the UK's largest drug company, is to invest £275 million across three of its British factories, insisting the country remains an attractive place to invest3.
This is not just about keeping calm or doing the morally right thing. The knock-on effect of anxious employees on organisations can be considerable. Money worries have resulted in 16% of respondents to Neyber's pre-Brexit survey struggling to concentrate on their jobs and 8% missing a day off work.
The cost of absence and presenteeism
Absence already costs UK business £29 billion a year, according to the CIPD, and presenteeism - being in work but not getting much done - is thought to cost twice that, according to Sir Cary Cooper, professor of organisational psychology and health at Manchester Business School4.
Employers shouldn't forget about the importance of employee health and wellbeing - financial, as well as physical and mental - during this turbulent period. Continuing to provide the benefits that can help boost wellbeing, examining cost-effective options to help employees with financial matters and ensuring ongoing communication flow from the organisation to employees will be vital in the coming months.
In our latest white paper, we examine ways in which organisations can allay fears by creating a wellbeing strategy and a working environment that shows that employees are cared for and valued.
This approach will also ensure employers and their workforces are as productive as possible and both resilient and prepared for whatever the future holds for UK business.
1 Neyber, 2016, The DNA of Financial Wellbeing