Financial stress is one of the leading factors affecting mental health today.
Almost three quarters (73%) of working adults say they are worried, unhappy or stressed about their finances, according to research by Claro Wellbeing, and it’s affecting our work, relationships and overall wellbeing.
Many people across different industries and salary brackets are finding it hard to cope financially at the moment.
Over a third of working adults (37%) say they struggle, fall behind or cannot keep up with bills. Almost one in three of this group (30%) earn more than £150,000 a year.
But do you know how your staff’s money worries are also hurting your business?
We’ve listed four significant ways financial stress is impacting organisations below:
1. Productivity is hit - hard
More than two thirds (67%) of staff say financial stress affects their performance at work, according to research by Claro Wellbeing.
More than half (59%) say they are less productive, with the average employee spending three-and-a-half days at work managing their personal finances. Furthermore, almost one in five (17%) take more sick days.
This is a real issue - especially now amidst a cost of living crisis, high energy bills and rising food and fuel prices.
Because realistically, how can anyone concentrate when they are worried about money?
This is the case across salary brackets - just because someone has a high wage doesn’t mean they are immune from financial stress - and industries, although some are more affected than others.
For example, our recent research suggests that workers in HR and recruitment are the most affected by financial stress with 100% of these industries’ employees saying it impacts their work.
Many people in these industries work on commission and have low starting salaries, which may leave them feeling financially unstable.
High percentages of employees in tech, media and finance also say money worries prevented them from performing effectively at work.
2. Company culture suffers
We’ve said it before and we’ll say it again - money worries are not good for morale.
Almost half (46%) of employees say financial pressure affects their relationship with their manager, according to the Money and Pensions Service, and it can also cause tension between colleagues.
Not only does this create a poor working atmosphere, but it can lead to complaints amongst staff, more work for HR and retention difficulties.
Furthermore, one in two (55%) workers do not think their employer cares about their financial wellbeing, which could lead to resentment and a lack of trust between staff and their organisation.
3. Staff will jump ship
When faced with money worries, most people have two options - to cut costs or increase their income by getting an additional or higher-paying job.
Not everyone has the time and energy to take on extra work - and those that do may struggle with their work performance in both roles.
With so many people experiencing financial pressure at the moment, businesses are experiencing - and will continue to experience - a real challenge with staff retention.
Almost one in five (19%) workers say they plan to leave their current job for one offering a higher salary if the cost of living crisis continues or gets worse.
Not all companies can offer staff salary increases, but it’s important to explore effective solutions or risk losing staff. We’ve listed a number of other solutions, such as investing in staff development and boosting benefits, here.
4. Business costs escalate
Financial stress is expensive.
Consider how much it sets your business back in lost productivity, sickness absence and recruiting new staff to replace those that have found a higher-paying job.
The amount it costs each organisation will depend on a number of factors, including industry and average salary, but it can run into eye-watering sums.
For example, the collective impact of staff in the tech industry struggling with their financial wellbeing is costing businesses £3.18 billion per year, according to calculations by Claro Wellbeing. This is the equivalent to £1,595 per employee in productivity, sickness absence and recruitment costs.
Claro Wellbeing has created a calculator to help you understand more about your team’s financial situation and how much it could cost your business.
Financial stress isn’t just an individual concern, it has a significantly wider impact and cost.
Until now only the most progressive companies have prioritised their staff’s financial health - but we are seeing more businesses make this a focus in their overall wellbeing strategy, and for good reason.
A financial wellbeing programme won’t look the same for every company but it should be inclusive for all staff.
This could include one-to-one financial coaching, which offers bespoke sessions for individuals to help them manage their personal money challenges and goals no matter their circumstances, tailored and accessible webinars and educational content that covers core personal finance topics.
What you decide to offer will depend on your staff’s needs but one thing’s for certain - you cannot afford to ignore your employees’ financial health.
Bring out the best in your people
Invest in their financial wellbeing and you both win. Discover how Claro Wellbeing can help you move your organisation forwards in 2023.