More action needed to address workers' money worries

HR directors have said financial concerns, compounded by the pandemic, are causing significantly more employee stress and better support is needed to address them.

A survey of 506 HRDs from UK businesses has revealed 49% of employees are suffering from increased stress and anxiety, fuelled by financial concerns from the pandemic. 

A further 40% of those surveyed said money worries were impacting workers’ motivation and productivity, while 65% warned the issue was going to be “the next big employee challenge”. 

The threat of poor financial wellbeing:

Employees struggling to keep on top of bills

Money worries impacting employees' ability to sleep

Employers unsure how to provide financial education to employees

More than half (54%) of the HR decision-makers responding to the study from Scottish Widows, agreed that their businesses must do more to support employees with financial wellbeing concerns, with less than a third (29%) stating that they referred their employees to an Independent Financial advisor for help. 

Encouragingly, 65% said their staff were increasingly confiding in them regarding their mental health with 52% of staff specifically wanting to discuss personal debt, increased personal costs related to working from home and saving for retirement.

Meanwhile, according to the study, 36% of employers have increased contributions to employee pensions beyond the legal minimum, while 34% plan to do so within the next two years.

Emily Pearson, managing director and founder of workplace mental health consultancy Our Minds Work, told HR magazine: “The need for employers to support employee mental health and wellbeing has always been there, however when the impacts of COVID hit, we did see an increase in employers looking for solutions for problems related to employee’s mental wellbeing.

“Specifically, we saw an increase in requests for training for managers to not only provide the skills to support employees experiencing poor mental health, but to also give them the capabilities to prevent work related stress.

“We also experienced an increase in requests for building emotional resilience and coping with change workshops to provide strategies and tools to empower employees to look after their own mental health too."

Pearson said that since financial stressors could stop employees performing at their best and trigger mental health problems, such as stress, anxiety, depression and even suicide, employers had an interest in helping their people make healthy financial choices and habits.

“Financial wellbeing should be a part of any robust mental health strategy. Poor mental health can cause financial problems just as financial problems can cause poor mental health.

"Employers are uniquely positioned to deliver financial advice and support, especially when it is part of a holistic approach to tackling poor mental health in the workplace,” she said.

Graeme Bold, workplace pensions director at Scottish Widows, said that though progress has been made on mental wellbeing, employers must ensure that this extends to financial health.

“Left unchecked, this problem could become a ticking timebomb for both employers and employees. Employers are well used to the idea of investing in support services such as mental health first aiders and counselling helplines. Forward-thinking companies could extend this support to financial wellbeing – for example, implementing a ‘financial wellbeing’ policy or referring employees to an IFA for advice," he said.

The survey found that over a third of employers (36%) have increased their contributions to employee pensions beyond the legal minimum over the past year, and 34% plan to do so within the next two years.

“Opportunities to discuss financial issues with an employer, such as the recent Pension Awareness Day, can help employees focus on their long-term financial planning and share any concerns they might have about their future," added Bold.

"For employers it’s crucial to take the lead in supporting their employees with financial wellbeing and long-term resilience. Fostering a culture of support, openness and engagement will lead to happier and more productive workplaces.”