Research by the Chartered Institute of Personnel and Development (CIPD), sponsored by Close Brothers and released in January 2017, found that one in four employees admit that money worries have affected their performance at work. Based on a survey of more than 1,800 respondents, the results showed that while younger employees, those working in low-wage jobs and those living in and around London are more likely to report that financial fears have impacted their work, others have also been affected.
For instance, while three in 10 employees earning less than £15,000 say financial anxieties have affected their work, one in five of those earning between £45,000 and £59,999, and one in seven of those enjoying an income of £60,000 or more, also report that their work performance has suffered due to money worries.
As part of the same project, research by the Institute for Employment Studies (IES) demonstrated a clear association between poor financial wellness, poor employee health and poor employee performance. Higher absence and stress, poorer mental health and performance as well as poor decision-making and focus are all connected with low employee financial welfare.
Just as poor financial wellbeing can have an adverse impact on employee mental health, poor mental health can lead to poor spending, saving or investment decisions, resulting in poor financial wellbeing.
It can be a vicious circle, and despite the link between financial welfare and productivity, research published by the IES in August 2018, titled Building the business case for employee financial wellbeing, found that there still remains a lag in employers taking action in this area, and that people professionals are key to building a business case for support; this is a view shared by the CIPD.
The aforementioned August 2018 IES research also found that misplaced concerns and outdated attitudes among senior staff are key barriers to support for employee financial wellbeing. There is also plenty of apprehension over the apparent ‘invasion’ of employees’ personal lives.
However, the IES believes that these attitudes may be unfounded, with many employees questioned as part of its research wanting greater engagement from their organisation on this matter.
In conclusion, HR and people professionals have a crucial role in championing organisational support for employee financial wellness to senior decision makers. As investors become ever more interested in how firms treat their employees and clients, workplace financial wellbeing gives an insight into how organisations value and recognise the contributions of their employees and invest in their welfare.
Charles Cotton is senior reward and performance adviser at the Chartered Institute for Personnel and Development (CIPD)