Four ways to support employees worried about their finances

Debt can be a significant challenge for some people and worrying about personal finances can contribute to mental health problems.

In recent years, the number of people classified as in debt has risen – perhaps unsurprising given the challenges of Covid, and the soaring cost of living, including huge spikes in the cost of essentials like food, fuel and utilities.Research shows that over 1.5 million people in the UK are experiencing both problematic debt and mental health problems, and only a third of the people in financial debt receive help. Debt and financial worries are a significant challenge, and can contribute to mental health problems, including anxiety, depression and stress.

Eight million people - representing 15% of the UK population - required debt advice in 2023. Typically, these individuals are under 35 years old, in households with children and low income, from underrepresented communities, and more likely to have experienced an income shock in the previous three years, such as a drop in earnings. 

Common signs

Some of the common signs an employee or worker is feeling stressed and worried about financial concerns in the workplace are:

• Absence: taking an unusual amount of time off work

• Reduced tolerance: overreacting to situations in the workplace

• Pessimism: focusing too much on the negative aspects of the job

• Performance issues: struggling to concentrate or complete tasks either day to day or by setting deadlines

• Isolation: reduced social skills or less interpersonal interactions with other colleagues, concerns about what others think

• Low confidence: turning down opportunities for development or promotion or plateauing in their career 

Four ways to provide financial support

It is important to provide comprehensive support to employees struggling with financial burdens and signpost those in financial difficulty to relevant services. 

You can provide support to employees with financial worries in the workplace by: 

1. Having an open culture
   

   • This must be one where employees feel safe to speak openly with their line manager or HR leader about their concerns and how they feel.

   • Listen to the individual and ask them what support they feel they require.

   • Consider signposting employees to organisations which specialise in money and debt advice, such as independent advice on the UK Government website. 

2. Considering how you can support employees financially 
   

   • If your organisation is unable to provide pay increases and bonuses, you could look at other ways to provide support, such as discount vouchers and rewards.

   • Also consider salary sacrifice initiatives, such as electric car schemes and cycle to work schemes. 

3. Encouraging strategies to promote good mental health in times of difficulty  

   • By having a workplace culture that supports work/life balance and encourages employees to have a variety of activities that they value and give them feelings of pleasure, achievement, and closeness.

   • Also encouraging workplace initiatives such as mindfulness skills, which help individuals to notice but not engage with worrying thoughts. 

4. Modelling good practice
   

   • By taking care of your wellbeing, being compassionate towards yourself and being open with employees about how you do this then you will empower your staff to do the same.

Value of employee benefits

Employee benefits are a significant and cost neutral solution that employers can use to provide their workforce with tangible financial support. They have the potential to play a huge role in enhancing an employee’s life, both at and away from work, and enhance employee engagement, recruitment and retention strategies, and worker and business productivity levels.

The benefits app from Magic Connect has everything employers need to boost engagement thanks to our game changing solution that brings everything together in one place. The app supports work life balance, physical and financial wellbeing, and personal professional development, with everything all in one app, which is a complementary add-on element of our expert partner payroll solutions. Find out more here.