Financial stress costs UK businesses £10.3 billion a year. Could financial advice help your firm?
Financial worries can harm the mental wellbeing of employees, and research suggests it could negatively affect the productivity of businesses too. As an employer, offering financial advice to your team could be a win-win.
Inflation has led to the cost of living soaring, so it’s not surprising that more households are concerned about their finances. What may be unexpected is the material impact it could have on your business.
A report from Aegon found that 12% of private workers missed work due to financial concerns in 2023. On average, these employees were absent from work for 4.7 days.
Staff taking time off work when they’re financially stressed could be just the tip of the iceberg. The report found that a more prevalent issue was presenteeism – where employees attend work but experience significantly reduced productivity due to personal and health-related factors.
Indeed, almost a quarter of employees surveyed said their work productivity had declined over the last two years due to financial worries.
These lost workdays are estimated to have collectively cost UK employers £10.3 billion over the year.
As younger generations are less likely to have accumulated wealth, it’s unsurprising that workers aged between 16 and 44 are more likely to be affected by financial stress.
Offering financial guidance as a workplace benefit could be valuable to both your employees and the business. Here are three reasons why.
1. You could help employees take control of their finances
Money concerns might affect more of your employees than you think.
According to research from National Debtline, almost half of UK adults started 2024 worrying about money, with 9% stating they felt unable to cope because of their finances. As high inflation continues to place pressure on households, nearly a third expect their finances to be worse by the end of 2024.
For some employees, meeting with a financial planner could identify steps they may take to improve their financial situation, or they might find they’re in a better position than they believe. As well as supporting daily money concerns, a financial plan could also address long-term worries, like whether they’re saving enough for retirement.
You might also want to signpost employees to organisations, such as StepChange, that could offer support if they’re struggling with debt.
If employees are taking time off work or experiencing lower productivity because they’re worried about finances, offering financial advice that’s either delivered to your team or on a one-on-one basis could have a direct effect on your business’s bottom line.
2. You can use financial guidance to highlight the benefits you provide
As an employer, you might offer financial benefits to your employees. Financial guidance offers a great opportunity to draw attention to them.
Taking the time to explain perks like salary sacrifice schemes, additional pension contributions, or group protection could mean more of your team makes use of them. Some of your employees may not know about all your workplace benefits, and others might not understand why they could be valuable to them.
Other perks could support reducing financial stress among your team too. For instance, providing access to a therapist may help them learn better ways to cope when they feel stressed.
Not only could discussing perks ease some of the financial concerns your employees may be facing, but it may benefit your business too. Being aware of workplace benefits could boost job satisfaction and improve employee retention.
We could work with you to review the financial workplace benefits you offer and improve awareness of them among your employees.
3. You could demonstrate you value your employees’ wellbeing
Don’t underestimate the importance of ensuring your employees feel valued – it could play an essential part in their job satisfaction and how long they remain part of your business.
Indeed, a 2023 survey published in People Management found that half of UK workers said they would prefer to have “great relationships” at work than a 10% pay increase. Demonstrating that your employees’ concerns are important to you could help improve relationships and how they view the business.
Contact us to talk about the financial wellbeing of your employees
If you’d like to discuss how we could improve the financial wellbeing of your employees, please contact us.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Workplace pensions are regulated by The Pension Regulator.