Money worries are now higher on working people’s list of concerns than at any time in living memory.
With real wages almost stagnant during the downturn and with inflation, job loss and job insecurity eating into disposable income and financial stability, the time to step up employer support for financially strapped employees is long overdue.
We see in our research the serious effects of money worries on employee attendance, performance and wellbeing. In a study published in March 2013 for the Bank Workers Charity, Bank on your people, in partnership with Robertson Cooper and The Work Foundation, we found 31% of bank workers said they were struggling to keep up with loan repayments and 41% said they were concerned about their financial security.
And in a study of insurance company workers,Why do employees come to work when ill? published by The Work Foundation and Axa PPP Healthcare in April 2010, we found that financial worries were a major contributor to presenteeism (going to work when ill) and lost productivity.
Investing in workplace financial education has to be part of the answer. Many larger organisations have, for many years, provided pre-retirement courses for employees within five years of retirement, helping them with financial planning and other skills.
Yet, in many cases today, it is people much earlier in their career who need basic support with budgeting, how to manage competing debts, how to make pension provision, and so on.
A couple of years ago, I spoke to a medium-sized firm with a young workforce that hires a semi-retired financial adviser to visit its headquarters once every couple of months to offer financial advice to anyone who wants it. This so-called ‘Money Dad’ rapidly became one of the most popular, well-used and cost-effective perks the employer had ever initiated.
But with over 70% of the UK workforce (according to the Chartered Institute of Personnel and Development’s Summer 2012 Employee Outlook focus, August 2012) currently getting no access to financial advice through their employer, the more we can do to support employees with money worries, the better for business.
Stephen Bevan is director of the Centre for Workforce Effectiveness at The Work Foundation