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Money worries affecting 1 in 4 employees at work.

Posted by: Tom Morris


 With inflation set to increase, even possibly beyond the Bank of England’s maximum of 2%, the CIPD has reported that a quarter of employees are suffering with money problems so severe it’s impacting their ability to perform at work.  The report considered a cross-section of 1,817 adults that reflect a representation of the UK workforce in relation to sector, size and industry.

The research found that the most affected are younger earners between the ages of 25 and 34 as well as those living and working in London. And it’s not just those at the lower end of the pay scale, with 1 in 5 people earning an annual wage between £45,000 and £59,999, admitting that their money concerns have also caused issues at work.

The most common issue is fatigue due to lost sleep worrying about money problems, with a reported 19% of employees suffering. Reduced cognitive ability due to financial anxiety was also reported, with 1 in 10 staff saying that concentrating and making decisions is difficult and this figure jumps to 1 in 5 amongst 25-34 year olds. The anxiety can even spill over into an absence issue with 8% of the UK workforce admit to taking time off work due to financial stress, resulting in an estimated loss of 17.5 million working hours equating to a £120.7 billion loss for the UK economy.

Employees typically described financial well-being as earning enough for themselves and their family to enjoy a reasonable lifestyle. Being able to save for the future, paying off existing debts and being rewarded in a fair and consistent manner at work were also listed as important. Not earning enough is the most obvious inhibitor to good money management, especially for younger workers and those earning less than £24,999. However other factors including the level of hassle involved when switching bank accounts, credit cards or household providers are all also major obstacles. This factor is more of an issue for those earning over £60,000 or senior managers, where the pressures of the job and time to organise this, gets in the way. Time to manage money was also an obstacle for 1 in 5 Londoners.

With rising living costs, housing and pension reforms, it looks like the financial pressures faced by employees are likely to only get worse over the next few decades, so employers needs to recognise that an employee’s wider financial situation is relevant to behaviour and performance at work. Employees of all types and all earning levels are at risk of poor financial well-being and could require help and support to maximise well being and avoid debt, high stress levels and anxiety.

However, only a small number of employees have said they would actually be comfortable discussing money worries with their employer, as believe that their financial situation could reflect negatively on how they are regarded by senior staff and colleagues.

Considering the sensitivity of the topic, employers could provide workshops or group sessions that are not specifically targeted to one situation or person. Nowadays employers provide a wealth of staff benefits; however employees may not be aware of how they could be implemented in order to improve their financial well-being. So seminars on how benefits work, how they can be activated and the impact they could have, could be very beneficial for employees. These new age employee benefits are often focused on lifestyle and physical wellness, with only 42% of companies having a financial wellbeing strategy/education as part of their employee package. Such a strategy including providing sources of independent advice, how to make choices to get the most from their earnings and offering education, could be highly beneficial to employee and employer to help increase productivity, improve job performance, decision making and concentration levels as well as reducing absenteeism.

Source: CIPD

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