The 9 most compelling reasons why every employer must prioritise financial wellbeing for employees now
Financial wellbeing industry data examined reveals just how much UK employees are struggling with money since the pandemic started.
By studying research from six key financial wellbeing reports, an expert in payroll and financial wellbeing has highlighted the pandemic’s impact on employee finances and their mental health. The data shows, too, how this affects organisational productivity, absence, wellbeing and profits. According to one report, individual companies with over 1000 employees, lose an average of £3.5 million each year due to poor staff financial wellbeing1.
Simon Bocca is founder and CEO of PayCaptain, the new technology that combines payroll with financial wellness and banking to support employers and employees. After examining reports from Aon, Close Brothers, EY, Nudge, Salary Finance and Willis Towers Watson, he said:
‘We know that the pandemic has adversely affected the financial situation of millions of people in the UK, employed or not. We also know that it directly impacts a person’s mental health and their ability to concentrate, feel well and be productive at work.
“What we’re finding is that huge numbers of employers want to help employees, but often don’t know the best way to do it.
“We’ve compiled the most important stats to show the depth of the issues to add weight to an employer’s financial wellbeing strategy. Employees may be facing a multitude of issues – debt, struggling between pay days, no fall-back savings or knowledge how to budget. Organisations that aim to understand the issues employees are experiencing will be able to implement the best support strategies so people can make headway.”
These are the 9 most compelling financial wellbeing stats PayCaptain recommends every employer should know:
Employee financial wellbeing is considerably worse since the start of the first lockdown
- Prior to the pandemic, 36% of UK employees were worried about money2.
- Now, 42% of people feel their financial wellbeing is worse than in the previous six months. Fifty-two percent also worry about finances at least once a week and nearly one in five people (18%) worry about it every day3.
- 72% of 4000 people (US and UK) say they now struggle to meet or are anxious about the costs of day-to-day living1.
The cost of poor financial wellbeing on an employee’s mental health can detrimentally impact wellbeing
- Those with poor financial health are 3.7x more likely to struggle with anxiety and 5.3x more likely to feel depressed4. Conversely, those with strong financial wellbeing are 23x more likely to be content with life3.
- Of those who expressed worries about money, a quarter felt their mental health had suffered as a result3.
The impacts of poor financial health on employee productivity, retention, absence and profits is all too real
- For those struggling with their financial wellbeing, 75% stated that it had a significant impact on their work or life situations1.
- As a result, on average, employees annually take between 1.5-2.5 off work due to financial troubles. At the same time, employees average 3 days of unproductive work due to the same cause5.
- Because of increasing numbers of lost talent and absent employees, not only is productivity suffering but so are organisational profits. Due to the costs of annual staff turnover, a cumulative £30 billion has been lost by companies in the UK. Yet for individual companies with over 1000 employees, an average of £3.5 million is lost each year due to poor financial wellbeing amongst staff1.
Employees are acutely aware of the need for good financial education
- As financial stress rises, employees are increasingly aware of the need to improve their financial wellbeing. In fact, for 87% of people seeking good financial health, gaining control over their money is the top priority. As well as this, 85% said improving their skills and understanding surrounding finances is crucial for their financial success3.
Simon Bocca of PayCaptain summarised:
“It’s clear that employees would like more support from their employers. A third don’t feel well supported by their employer and nearly another third (27%) say that the support they’re given is of little help6. In a report released at the beginning of 2020, 62% of companies responding believed employee financial wellbeing was their responsibility and 48% were planning to implement initiatives7. We believe that this has increased substantially since the pandemic.
“Leaders who look to understand the general issues employees are experiencing can provide them with the most meaningful and useful support so they can positively manage their situation, rather than worrying about it and impacting their working days.”
To learn more visit www.paycaptain.com
4 Salary Finance – 10 Financial Wellbeing facts for employers, October 2020