Low financial capability and resilience is and has been a significant cause of stress across the UK workforce. These money worries have a clear impact on their productivity at work and attrition rate.
Employers always have an impact on the financial wellbeing of their workforce as the primary source of income for most people. The answer isn’t just higher levels of pay. Instead, employers need to help their staff learn healthy financial behaviours and build financial resilience.
According to a survey by SMF, One in five people (19%) think they are now under less financial pressure than they were two years ago. But twice as many people (40%) feel that they are now under more financial pressure. A third of people (32%) are fairly or very concerned about the level of debt they have at the moment and Four in ten workers (38%) say money worries have made them feel stressed. These worries have a clear impact on how people feel and behave as they go about their day-to-day life and work.
An individual’s financial wellbeing is inextricably tied to their workplace. As per Conclusion of the workplace report, Barclays Corporate & Employer Solutions and Barclays Workplace Banking, May 2014.
• 46% of British workers are struggling with their finance
• 70% have little or no savings at all
Employers will necessarily impact on the financial wellbeing of employees, whether they intend to or not.
What Employers can do to improve employee’s financial stress?
• UK employers must now offer a workplace pension to all employees. These pensions must be offered on an opt-out basis – that is, the employer will automatically help the worker save for their retirement by putting away a small proportion of their salary, unless they specifically decide not to participate.
• Auto-enrolment into income protection policies. By providing insurance cover for those times and individual is unable to work due to ill health or family problems, these policies can help to smooth income in the same way as savings.
• Providing budgeting tools alongside online payroll services could help employees to make better decisions with their money.
• Employers could also consider directing their workforce to online financial aggregator platforms, which help consumers to see all their financial assets and obligations in one place and to track their spending.
• Employer should tie up with financial employee benefit providers to provide access to affordable loans to the workforce via ethical lenders like Credit Unions
• Enable employees to borrow money through workplace benefits at a competitive rate.
Provision of simple tools could also help employees to take control of their money. Together, these steps taken could help the UK workforce to move to more sustainable forms of credit, grow their savings and avoid the stress of money worries which in turn would mean that people will not frequently change their job for more compensation and would lead to reduction in attrition rate.