While inflation dropped below 10% in May, and the Bank of England is confident that the banking system is resilient in the face of rising interest rates, the same can’t necessarily be said of individuals. As the cost of living crisis continues to eat into household budgets, many are struggling to meet their financial obligations, with a recent Financial Conduct Authority study putting the total number of those up against it as high as 10 million.
For employers, according to a timely new report produced by the National Forum for Health and Wellbeing at Work and Alliance Manchester Business School, this points to an urgent need to break down social taboos around speaking about money and encourage employees to share their financial concerns with their colleagues.
The Financial Wellbeing Guide 2023 says that while pay is an important factor in tackling worries about the rising cost of living, it is imperative for employers to speak to employees about money worries and proactively tackle the stigma in talking about financial difficulty. It also says managers need to do more to signpost the support that is available to workers or risk failing to address the problem.
The report says more than two thirds (68%) of UK employees say they would not tell their employer about personal money worries, yet like many other sources of unmanageable stress, financial problems can impact on mental and physical health, relationships, performance at work and overall quality of life.
In the UK a record 2.5 million people are unable to work due to long-term illness and 28% of people report that financial concerns are negatively affecting their work performance, highlighting the need for businesses to bolster support for employees enduring financial difficulties.
Experts from the National Forum for Health and Wellbeing – including Barclays, a member of the forum – have developed the Financial Wellbeing Guide to urge UK employers to take immediate action to tackle the issue, and to provide strategies to support employees during the cost-of-living crisis.
Sir Cary Cooper, Professor of Organisational Psychology & Health at Alliance Manchester Business School, said:
“It’s clear that having a workforce that feels financially secure is as important to employers as it is to their employees. It will create a happier and more productive workforce, alleviating some of the concerns that might be preventing them from being their best at work.
“While fair pay is vital to helping employees during the current challenging economic landscape, it should just be the foundation of a broader plan to support colleagues that also includes targeted interventions such as education, guidance and flexibility, and a supportive and inclusive culture.”
Sir Cary added that supportive and skilled managers were key, as they are more likely to enable a culture of flexibility, have supportive conversations about financial wellbeing, and have effective career conversations to help their teams progress into higher skilled and more highly paid roles.
“It’s imperative that management are being proactive in talking to their employees and creating an environment where they feel they can speak openly about how they feel and find the support they need.”
With employers grappling with rising business costs, the report offers practical ways to offer support without the need for making large investments.
Recommendations focus on the need for inclusive, proactive measures from management led campaigns to tackle stigma, to financial literacy programmes, to offering flexible working and ensuring equitable approaches to career progression and access to development programmes, all of which are so vital to giving employees the opportunity to develop the skills they need to enhance their earning potential.
Francine Watson, Global Director of Wellbeing at Barclays, said:
“The authors of this report suggest that financial wellbeing remains by far the most neglected area of an organisation’s health and wellbeing activity, which can have significant impacts on mental and physical health.
“These issues have been brought into even sharper focus by the ongoing cost of living crisis, but the actual circumstances that can create a personal financial crisis remain consistent over time, underscoring the need for strategic long-term approaches to offering support.
“This guide offers implementable actions relevant to organisations starting out on their financial wellbeing journey, as well as those wishing to expand their offering.”You can find out more and download the Financial Wellbeing Guide here.
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