How can employers tackle in-work poverty?


Need to know:

  • Identifying employees struggling with in-work poverty is difficult, but offering universal solutions can ensure that financial wellbeing initiatives benefit all those in need.
  • Simple measures, such as exploring how to best manage overtime or introducing flexible working, can help staff improve their finances more effectively.
  • A financial wellbeing strategy that effectively tackles in-work poverty can be key to keeping valuable staff motivated, engaged and productive.

Slow wage growth and higher living costs mean that the line between gainful employment and barely making ends meet is becoming increasingly thin, as a growing number of UK employees struggle to earn enough to cover the costs of essentials such as food, clothing and accommodation.

The Joseph Rowntree Foundation’s annual report, UK poverty 2018, published in December 2018, put that number at four million.

On 29 July 2019, Mayor of London Sadiq Khan launched the Good Work Standard, which challenges employers to tackle, among other things, poverty among the workforce. Similarly, in June 2019, the Living Wage Foundation implemented its Living Hours campaign, to deal with insecurity around pay and hours among UK employees.

With household names such as Deloitte, SSE, EY and Lush already signing up to these initiatives, the focus now is on employers and the role they can play in supporting staff.

Financial stress

Close Brothers’ Financial wellbeing index 2019, published in January, showed that while 45% of organisations provide some level of financial wellness programme, the vast majority (94%) of employees currently worry about money, with 77% reporting being under so much stress that it affects their work.

Mark Pemberthy, head of defined contribution and wealth at Buck Consultants, says: “It’s clear that money worries are impacting people at work, which ultimately impacts businesses through lower productivity, lost working hours and absence.

“Behind these statistics is a very real human factor. Concerns about money can be a major stress point, and staff happiness and mental health must come first.”

Addressing financial stress and tackling poverty among employees is not as simple as raising wages, or focusing interventions on those in the lowest pay bands. For example, lower earners may, in fact, be the second or third source of income in a household, says Pemberthy. “In-work poverty can sometimes be hidden behind good pay that is too stretched, making it difficult to identify workers who need help,” he explains. “Therefore, broad access to resources and tools is likely to be most effective.”

Overcoming barriers

One of the other factors making it difficult to identify those who might be struggling with in-work poverty is the stigma that continues to be attached to talking about financial issues. While many organisations are working on breaking down these barriers and creating a more open culture, they should not, in the meantime, assume that staff in need will speak up.

Therefore, the best approach might be to discuss general financial wellbeing topics, and provide overarching advice on how employees can make money go further, allowing those struggling with in-work poverty to benefit alongside the rest of the workforce without revealing their financial status.

Andrew Rabbitt, chief executive officer of technology organisation Incuto, which works with organisations to eradicate in-work poverty, says: “We need a cultural shift and solutions that are offered universally, so that employees struggling with debt or money management don’t feel singled out.”

Organisations should consider offering broad financial education that is applicable to a diverse range of staff members, supporting this with online tools and services that can be accessed in private for those who want to explore sensitive topics such as debt management.


Employers must take an approach that addresses the fact that in-work poverty is about more than just problem debt, and can face a broad range of employees in various circumstances.

In addition to providing a wide-ranging approach, employers would do well to consider the day-to-day structures and strategies that, although not direct forms of monetary support themselves, do factor into an employee’s overall financial health.

Simple measures, such as finding smarter ways of managing overtime, shifts and human capital systems, or introducing flexible working, can all help staff manage their finances more effectively, and in the long-term.

There are other ways to facilitate healthy saving habits, says Rabbitt. “Employer-enabled access to ethical financial service partners, such as credit unions and community banks, that focus on the financial wellbeing of the individual and are mindful of the implications of poverty on things like mental health, would be impactful,” he explains.

Employee wellbeing

As highlighted by campaigns such as Living Hours, increasing pay and providing stability can be the key to helping employees start on a positive path. “Many aspects of financial wellbeing, such as increased security, an ability to plan for the future and building financial resilience, can be improved by initiatives such as Living Hours,” says Pemberthy.

There is no escaping the fact that being paid fairly and having fewer money worries at home significantly improves concentration and motivation at work. In launching the Good Work Plan, Khan noted the increasingly visible links between fair treatment of staff, employee wellbeing, and business performance.

Kathryn Kendall, chief people officer at Benefex, says: “For employees, improving financial wellbeing and reducing in-work poverty can be the difference between staying loyal and motivated, or falling by the wayside.

“In a world where we are competing for the best talent, where reviews of [employers] are plastered all over Glassdoor, and where young employees are more interested in social responsibility than any previous generation, an organisation’s reputation and standing as an employer of choice are more valuable than ever.”

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