Money, Money, Money…

Does your organisation see a spike in sickness absence towards the end of the month? If so, it’s a sign that employees’ financial wellbeing is far from healthy.

The Wellbeing Project’s money coach, Jo Thresher, says absence at the end of a month is a common sign of financial difficulties.  ‘People are not making it to payday and they can’t afford the bus or train fare or to fill up on petrol to come into work.  Or it can be that the stress caused by financial worries peaks at the end of the month and so does the illness ratio, with the level of duvet days increasing,’ she says.

It is a myth that financial worries only affect those at the lower end of the pay scale, says Jo.  In fact, financial wellbeing – and lack of it – cuts across every part of an organisation, regardless of salary level.  The CIPD’s Employee Financial Wellbeing report from 2017 showed that a fifth of employees earning £45,000 to £59,999 were so worried about finances that it affected their ability to do their job.

‘It can affect anyone at any time.  I’ve seen business people who have run up their company credit card with food shopping because they have run out of money,’ says Jo.

On the face of it, this is hard to understand. How can someone who is paid £50k per annum face financial problems in the same way that someone on £20k does?  Jo says that the causes for money woes may differ, but the symptoms of the resulting worry and stress can be the same.

All Salary Levels

Examples that have arisen for higher earners during Jo’s workplace sessions have included difficulties caused by paying for children’s private education, divorce, making poor investment decisions and lifestyle choices.

‘People at that level often feel they are expected to have and do certain things, such as go skiing twice year, have a new car or the latest phone,’ says Jo.  ‘There are always shiny new things to buy.’

Those on a lower salary face financial pressures for different reasons.  Jo says they are often good at budgeting because they do it so frequently, but they may find it hard to make ends meet because their bills outstrip their income and they are often unaware of help available.

‘They don’t know what they don’t know. They may not realise that moving a lot will affect their credit rating.  Or they don’t realise how much childcare vouchers will save them or how much benefit a pension will bring, because nobody teaches this to us. They are so busy thinking about the short term – putting food on the table and paying the bills – that they don’t think about the long term,’ says Jo.

The Extent Of The Problem

Whatever financial problems are being faced by individuals, a growing body of evidence shows that anxiety about finances leads to poorer mental, physical and social wellbeing, which can affect attendance and performance at work.

A report last year –  Financial Well-being in the Workplace: A Way Forward by the Financial Advice Working Group for HM Treasury and the Financial Conduct Authority showed that 90% of employers agreed that financial concerns have an impact on workplace performance. Research by Willis Towers Watson in 2016 found higher levels of financial stress result in higher absenteeism – in Europe, nearly seven work days a year were lost to absence in a group with high financial stress, compared with three days a year in a low financial stress group.  The 2017 report from Willis Tower Watson finds that employees who are troubled by their finances are twice as likely to be in poor health as those who declare themselves financially ‘unworried.’ They also report considerably higher stress levels, more absence and presenteeism, and significantly lower levels of work engagement.

In total, financial stress costs the UK economy £121 billion and 18 million working hours in time off work each year, found 2016 research by Neyber.

Neyber’s The DNA of Financial Wellbeing 2017 report revealed that finances were the biggest worry facing employees, with a third saying they had money concerns.  This is borne out by MetLife’s 2017 UK version of its Employee Benefits Trends study, which found that 39% of employee respondents are living payday to payday and 34% are distracted at work by financial concerns.

And a 2017 white paper Employee Financial Wellbeing – Time To Do More by The Bank Workers Charity found that almost half of all employees worry that they will be unable to retire, given the state of their finances, and one in three loses sleep because of this. It also found that one in four workers say they have lost sleep over money worries in general.

An Emotional Issue

A large part of the problem is that people often stick their head in the sand. Jo says that our relationship with money is complicated and an emotional issue that many find it hard to address.

People find it scary and boring and there can be an element of shame involved.  The British often don’t want to talk about money and everyone thinks that everyone else is doing it much better than them.

‘Those who earn more often feel a lot of shame – they feel they are good at their job so should be good with money and often people don’t want to admit that they are in the same situation as those they are managing,’ says Jo.

There is also a reluctance to seek help because many are worried that the organisations they might approach for guidance or support would try to sell them something.  Yet they feel unable to address it themselves – Jo says that adults in the UK have an average financial numeracy of a 9-year old. Even those who feel they have the ability to tackle the problems often cite time shortage as a reason they don’t.

Finding  Solutions

All these elements combine to render individuals stressed, anxious and disempowered.  This is where Jo can help.  Her sessions provide strategies, tools, and techniques to get employees back on track.  They include guidance on how to make more of what you have, tackling debt, financial planning including for retirement, government or employer schemes such as childcare financial support, and how to get on or move up the housing ladder.  She signposts to reputable outside sources of help and cuts through the jargon for those who find financial language confusing.

‘It’s not about getting people rich quick; it’s about meeting the person where they are.   I’ll say: “Where are you on the ladder of money and can I get you onto the next rung?”. That might be out of debt onto zero or from zero to having emergency savings,’ says Jo.

Financial wellbeing is a problem that is not going to disappear anytime soon.  In fact, it is getting worse.  An internet survey conducted for the Money Advice Trust (MAT) found that more people will struggle with their finances this January than last year – 16% said they were likely or very likely to fall behind with their finances in January 2018, as a result of Christmas spending. That amounts to 7.9 million people, the MAT said, and compares with 11% in a similar poll last year.

Such figures suggest that, for those employers who are not already addressing the financial wellbeing of their workforce, now is a good time to start.

To find out more about how Jo and The Wellbeing Project can help support your workforce’s financial wellbeing, go to: https://thewellbeingproject.co.uk/ourservices/wellbeing-workshops-resources/financial-wellbeing/

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