January is a notoriously lean month financially and stress relating to finances can spill over into the workplace in many ways, yet providing workers with solid financial tools may well be one key way to reduce stress levels at work.
According to research, more people worry about their finances than about divorce, living arrangements or even their physical health.
In response, the Reward and Employee Benefits Association (RBA) has shared the following top tips for tackling employees’ financial worries, provided by the financial wellbeing company Neyber, as follows.
Provide the tools to build a financial safety net. Less than one-third of adults have a month’s salary in savings and 14% have no savings at all. Helping staff to build a financial safety net of around six months’ salary will ensure they can cope if something unexpected happens and enables them to feel more in control of their money.
Give guidance on credit scores. An employee’s credit score is their passport to the best value deals and most affordable loans. However, three in 10 people say that they have no understanding of credit scores.
Understand employees’ needs. Around 70% of under 30s say they borrow regularly to cover basic finances. That can lead to money worries which quickly build up. If employers offer an Employee Assistance Programme, the aggregated data can be used to create a picture of what’s worrying employees and used to establish how to address concerns.
Help employees rein in debt. Credit cards and bank overdrafts are easily accessible, but they are also costly. Employers could consider offering an affordable loan scheme or debt consolidation service.
Build employees’ financial know-how. Some 24% of adults have little or no confidence when it comes to managing their money, so make sure staff are taking advantage of any financial education or advice on offer.
Comment by David Price, CEO of Health Assured
It is not uncommon for bank accounts to feel the squeeze after the Christmas period. Experiencing money problems can seriously impact an individual's mental health and overall productivity at work, so employers who take measures to help employees when they are struggling may find that a little support is beneficial for all.
One of the main issues with financial difficulties is that employees may not be forthcoming with information. If employers have a suspicion that an employee may be struggling with debt, the employee should be encouraged to talk about it. Chats of this nature should remain confidential and employers should keep in mind that employees may feel embarrassed, or worried that their financial struggles may impact their job prospects.
Depending on the initial discussions with the employee, employers may be able to identify various channels of assistance. If, for example, the employee is paid in line with the National Minimum Wage, the employer could consider increasing their pay in line with the “real” living wage. This is a voluntary commitment to paying employees an enhanced hourly rate in line with the cost of living, which currently stands at £10.55 per hour in London and £9.00 per hour for the rest of the UK.
Employers may consider offering the employee the chance to work paid overtime to earn some extra cash. This will not be an option for all businesses due to a number of factors but may be suitable if overtime is available either in the employee's usual role or another which is within their capabilities.
Alternatively, offering an advance on salary may be useful; however, it only presents a short-term remedy rather than a long-term solution.
A signpost to expert external advice may, on the other hand, provide the opportunity for longer-term assistance on managing money or debt counselling. Employee Assistance Programmes (EAPs) are useful in this situation as they typically offer a range of services designed to support individuals and can include help with financial wellbeing.
Last reviewed 9 January 2019