With record levels of inflation and rising costs of essentials such as energy and food, many employees are struggling to cope financially. As an employer, you have a duty to support your employees’ financial wellbeing and take effective steps to help them not just survive but thrive, now and in the future.
Employee financial wellbeing
Mintago’s latest research has shown that most employees would like more help when it comes to managing their finances, however 33% of those desiring further help do not know where to find it or who to turn to. Employers can help by making resources accessible to their employees, and informing them of platforms and charities that can put them on the path to better financial wellbeing.
Less than half of survey respondents answered yes when asked if they felt comfortable discussing personal issues such as mental health or financial worries with their employer. This suggests that most employees do not feel able to approach their employer on these matters. Employers should make it clear that their door is always open for members of their team who are struggling with personal matters, reassuring employees that their information will be treated confidentially. In addition, employers can provide access to useful resources such as debt charities and budgeting tools, helping employees to take the first steps in improving their financial wellbeing.
Despite inflation, employee wages have generally not increased. 68% of UK adults surveyed said that they have not received a wage increase from their employer in line with inflation. If employers cannot increase employee wages at this time due to business-related financial struggles, they should look for other ways to support employee financial wellbeing. This could include improving their employee benefits package, offering restaurant savings, discounted gym memberships and other incentives which encourage employees to take leisure time and focus on overall wellbeing.
37% of respondents said they would like to ask their employer for a wage increase but are unsure of how to approach the subject. Furthermore, only 27% of employees have asked their employer for a pay rise within the last six months, suggesting that they feel unable to approach their employer and perhaps do not share a rapport allowing them to express financial concerns.
Many employees are not financially prepared should their employment status suddenly change. In fact, 82% of survey respondents confirmed this. A large number of employees do not have an emergency fund containing the recommended 3-6 months of savings, having to use this money instead to afford immediate essentials such as food and fuel. Only 14% of 18-24-year-olds said that they would be prepared given this eventually. This implies that many young people are unable to save money whilst in employment due to the high cost of living.
Looking to the future
Financial wellbeing means having security now and in the future. Unfortunately, the majority of UK adults have revealed that they are not prioritising long-term goals in favour of immediate financial commitments. 72% of respondents are prioritising essential payments such as mortgage repayments and utility bills instead of looking to the future.
70% of people worry about their financial future, believing that their situation may deteriorate further rather than improve. Many individuals are not optimistic about their finances improving, with this possibly causing feelings of desolation and sadness leading to depression and anxiety. Mintago’s survey revealed that less than half of UK adults responding have conducted a thorough audit of their financial situation, and more women have than men. With evidence suggesting the importance of regularly taking a look at finances to manage them effectively, this suggests that many people would rather not focus on a negative situation.
It’s good to talk
Mintago’s research has revealed that 62% of UK adults limit the number of times that they meet with friends per month due to worries about overspending. Enjoying leisure time outside of work is vital for employees’ mental health. If this is not regularly possible, employees may feel unhappy in the workplace due to a poor work-life balance.
Younger people are more inclined to talk to others about financial concerns. Only 24% of 55-plus year-olds have spoken to friends, relatives or colleagues about their money worries. This would suggest that people belonging to this age group tend to be less open about their finances, and should therefore be encouraged to share concerns with people that they feel comfortable with.
Similarly, most people do not seek professional advice or guidance when it comes to their financial situation. Only 23% of respondents stated that they have spoken to a debt charity or sought other forms of free online support to help manage their financial concerns. This may be due to a lack of knowledge of available resources. Employers should promote resources to help tackle this problem. 20% of respondents have spoken to their mortgage or loan provider about potential repayment holidays or interest-only payment options. Employers should make employees aware of this as some people may not know that it is an option.
The link between mental health & financial wellbeing
In conclusion, there is clearly a strong link between financial wellbeing and mental health. If individuals are low and depressed due to financial concerns, they may lack the motivation to tackle money issues. This causes problems to spiral, making it more difficult for individuals to regain control.
Although spending money may give employees a quick boost of pleasure, in the long run this is likely to worsen any current money issues and may lead to a frequent desire to overspend. People may also be more inclined to make impulsive financial decisions for a quick boost of happiness.
If poor mental health is not addressed, employees’ ability to work may be impaired. This will reduce their total income and make their financial problems worse. Individuals may avoid thinking about money because it causes panic, meaning that they avoid checking their bank accounts and opening bills. Again, this may cause a spiral that only makes their financial wellbeing worse.
Employers play a key role in helping to improve employees’ financial wellbeing. With the help of resources, charities and discussing problems, employees can begin the road to managing their financial situation effectively.