Financial stress: How can employers help employees?
Posted: Sun 24th Oct 2021
In many circumstances, the stress an employee may experience at work has no relation to the tasks they've been asked to perform, or their working environment.
In fact, one of the biggest and growing causes of stress, anxiety and depression is caused by financial difficulty. According to a report from the Chartered Institute of Personnel and Development (CIPD), 19% of employees lost sleep worrying about their finances.
In addition, requests for advice from debt charity Step Change are at their highest levels to date. Some 620,000 people contacted the charity to ask for help last year, the equivalent of one new person every 51 seconds.
Growing financial worry
Often, it can take just one or two large unexpected expenses to cause serious financial stress, such as a boiler breaking down, car problems or caring for a sick relative. From our conversations with employees through our helpline and counselling service, it is clear that anxiety about financial worries is growing.
Financial worries can have detrimental effects on an employee's mental, physical and social wellbeing, which in turn can affect workplace attendance and performance.
As a result, it's in an employer's best interest to take financial wellbeing seriously and provide support in this area as part of an organised wellbeing strategy.
An employee assistance programme (EAP) is an effective staff benefit that can assist those at risk of falling into debt or already struggling with their finances. Many EAPs offer debt counselling, support services or refer people to specialist debt charities.
All conversations are confidential and aim to help employees to deal with both the stress caused by debt, and take practical measures to address them. An EAP also provides support for managers who have been approached for guidance on the matter.
There are also further practical measures available to employers. As many debt problems for employees begin with borrowing at the end of the monthly pay cycle, arranging employees to be paid as they earn can help to alleviate stress and financial difficulty at the end of each month.
Support for employers to help employees
Companies such as Hastee Pay have been launched to help employers with the logistics of this, and to give their staff an option of choosing when they are paid.
Other specialist financial providers help employees who are struggling with debt by offering a consolidated loan, with the repayments deducted from their monthly salary.
However, it's important to make sure any lending options help the employee in the long term and don't lead to them resenting their employer when they see money going straight from their pay slip into a loan repayment.
Most importantly, employers can support their employees by removing the stigma attached to having financial burdens, and provide financial education.
Presenting a platform that allows employees to talk openly about their problems and seek help before they escalate can help limit the risk of poor financial wellbeing, and help them retain their financial stability sooner.
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