In Focus: How financially resilient are your staff - and what can you do to help?
Our In Focus series of articles originally appeared in The Leadership Bulletin, a free weekly bulletin for leaders and managers. You can subscribe here.
This past week I came across a report from 2016 entitled ‘Working Well: How employers can improve the wellbeing and productivity of their workforce’. Among its claims was that low financial resilience - put bluntly, not having much in savings to help you in the event of something going wrong - was a key cause of stress for many people in the UK workforce.
For those who are used to saving every month and having a “rainy day fund”, it may come as a surprise to know that you’re probably in a minority among your colleagues. According to the report, more than half of workers would be significantly worried about a large unexpected expense, whilst 48% were not putting aside any money from their pay check per month. Almost a third of workers had no savings or investments at all.
What impact does this have on businesses and productivity? The Social Market Foundation reported that 40% of workers were stressed by money worries, with a quarter losing sleep because of it. One in eight workers even reported that their financial issues led to them struggling to concentrate at work, with 6% of workers missing work in the last year for reasons they associated with money problems.
Whilst the report is a few years old, it strikes me that for some workers, at least, the problem will have got worse since then. Whilst many people throughout the pandemic were able to save - a report earlier this year suggested there are £200 billion of “involuntary” pandemic savings in the UK - for many, the rise in the cost-of-living since the pandemic has made their financial situation precarious. A recent poll found that 27% of people in the UK were struggling financially as a result of rising cost of living.
It’s right that employers think about what they can do to help their employees at any time - but it’s even more important, and in everybody’s interest, when your staff’s problems are having a direct impact on their performance at work. So what can employers do to help? Here are some thoughts:
Do you have an interest-free loan scheme where you help employees buy essential goods through salary sacrifice? Setting one up could be easier than you think, with companies like Reward Gateway making this available as an employee perk. A programme such as this could help your employees know that an at-home crisis, like a broken washing machine, does not have to cause them added stress.
What resources can you provide for your employees to help with financial planning? It might be as simple as buying a set of these Clever Fox Budget Book 2.0 books and leaving them in a communal room with a note saying “Please feel free to take one if it is helpful for you.” You could also include a note with the contact details of who they can speak to at work if they are struggling.
Ask yourself: what can you offer your employees at a cheaper rate than they can acquire it themselves? For example, if you work in a city centre and many of your staff buy their lunch locally, paying a local caterer to provide food for the entire team just twice per week could make an appreciable difference to someone’s outgoings. A 2018 report said the average Brit spends £6.08 per day on lunch; taking that cost away twice a week over 48 working weeks could save an employee almost £600 per year. It would almost certainly cost you much less as you will be buying in bulk.
When it comes to helping your staff with the cost of living, it isn’t just the employees who benefit. The benefits for a business are multiple, too. So spend some time thinking about simple ways that you can help your team and reduce the likelihood of money worries taking over their home and working lives.