Monica Kalia, Co-Founder of Neyber
The well-being at work agenda has gathered momentum among employers and policy-makers since Dame Carol Black published her pioneering report, Working for a Healthier Tomorrow, in 2008.
Calling for a ‘new approach to health and work in Britain’, in which the promotion of good well-being is a fundamental component, the report concluded that the issues surrounding health at work are not just problems of medical practice but have far wider social and environmental causes. Just as poor well-being isn’t only caused by poor health, nor is medicine alone the only cure. Instead it’s one of a number of solutions possible to improve the well-being of employees.
We’ve learned a lot in the last eight years about well-being. We have a greater level of understanding of the business case for employers investing in supporting the well-being of their workforce. We have realised that poor well-being has many causes aside from poor health. We have seen clearer links between social, financial and environmental factors and health and well-being.
The CIPD’s own research in this area (April 2016) found the top three causes of stress in employees’ lives are money worries (22%), the nature of their job, for example pressure of working hours (22%), and family and relationship issues (20%).
While many employers and employees are now embracing flexible working to help reduce stress at work, past research by the CIPD and others found that employers have been less focused on helping their workers deal with their money anxieties.
We’re beginning to understand the impact of financial issues on well-being – a change that has also emerged in the last eight years since the global financial crisis. The significant repercussions of that crisis on employers and their ways of operating have in turn had a dramatic effect on individuals’ finances and, as a consequence, their well-being.
Despite long-held taboos relating to individuals’ ability to discuss their personal finances, the concepts of financial well-being and financial resilience (or lack of) are now gaining traction. They illustrate the profound effect that concerns about personal finances have on individuals’ health and well-being.
Neyber’s own research, The DNA of Financial Wellbeing, has surveyed 10,000 UK employees on their levels of financial well-being and what impact the various macro and micro responses to the credit crisis have had on both their finances and their health.
We’ve known for a long time that a significant proportion of the working population lacks a sufficient savings safety net. Our survey shows that many of those who save have less than one month’s salary in the bank – not necessarily enough to cover any unexpected financial outlay. So it’s not surprising that the vast majority of people surveyed in our report are worried about money.
Money worries and a lack of financial resilience manifest themselves in different ways in individuals. They may lose sleep, they may suffer anxiety and their working lives may be affected, as our report demonstrates.
Seventeen and a half million working hours are lost as a result of employees taking time off work because they are experiencing financial stress. Even if they make it into work, they can’t get their jobs done to the best of their abilities, as 55% say financial pressure distracts them from fulfilling their roles. And their relationships with colleagues and line managers are damaged because of the financial pressures employees are concerned about.
We know that younger employees are particularly vulnerable to money worries. And with the millennial age group predicted to comprise a larger and larger proportion of the workforce over the next ten years, so the number of employees affected by financial concerns will grow.
All this adds up to a substantial cost for employers to bear. We have calculated that the lost productivity and increased absence and employee turnover associated with financial stress costs UK employers in the region of £120.7 billion every year.
Once again, the business case for managing employees’ health and well-being is crystal clear. Our research demonstrates the repercussions of poor financial well-being on the workplace and shows the kinds of support employers can give employees to improve their financial resilience and support their well-being.
We know that many members of the workforce say they would value financial assistance from their employer, such as access to affordable loans, attractive savings, financial awareness programmes and support and guidance. And we believe that employees should have a statutory right to access fair financial services in the workplace, just as they do for pensions auto-enrolment.
Charles Cotton, Reward and Performance Adviser for the CIPD, adds, ‘Employers can play an active role in supporting their staff’s financial well-being. Today’s businesses need to consider the impact financial worries are having on employee health, happiness and productivity and look at what they can do to help reduce stress levels. Neyber’s research shows that staff would value any support given by their employer.’
Employers have many options available to them to assist employees in matters of personal finance. Now that we understand the scale of poor financial well-being and the knock-on effects of it in the workplace, it’s crucial that employers stop and think about what they can do to help their employees who are concerned about money, and how they build this into their overall well-being strategy.
The knock-on effect of addressing poor financial well-being will be reduced absence, improved levels of productivity and engagement, and lower levels of stress. In other words, improved well-being among the workforce.
Our levels of understanding of health and well-being have grown in the eight years since the Working for a Healthier Tomorrow report was published, but there is still a gap between understanding and practice by employers. Organisations need to fully realise the benefits that good levels of well-being among the workforce can offer and understand what measures they can take to address the causes, manifestations and solutions for poor well-being.
You can download the key findings of The DNA of Financial Wellbeing report here.
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