Imagine trying to concentrate at work when you know the bailiffs might be round at your house while you are out, and that when you check your phone at the end of the shift there will be 20 missed calls from debt collectors. I know I could not focus on work under those circumstances. Could you?
Financial worries are a real issue in the workplace. It is nice to imagine everyone can leave their problems at the door when they come to work but we are human beings, and we struggle to do so. When we are under financial pressure, including, in the worst case scenario, going through a debt crisis, we underperform at work, and our mental health can be seriously affected.
That is the evidence of a new report, Overstretched, overdrawn, underserved: financial difficulty and mental health at work, published in May 2017 by the Money and Mental Health Policy Institute, the charity dedicated to breaking the link between financial difficulties and mental health problems.
Our research has shown, over the last year, that mental health and financial wellbeing are intricately linked. Not only is it emotionally difficult to live with financial problems, having a mental health condition can seriously affect finances too. Often, the two work together to create a downward spiral.
Now we are making the case that it is in employers’ interests to get involved and help stop that spiral. Why? The report, sponsored by Salary Finance, sets out three things employers need to know.
Poor mental health saps productivity: When staff have mental health problems, it can affect their ability to do their job. Our research shows a third of employees said they accomplished less than they would like due to emotional problems or worries, and 32% felt they worked less carefully than usual.
Financial worries sap productivity: Half of employees who are finding things difficult financially felt they achieve less than they would like or work less carefully. By comparison, only one in three of those managing well financially reported these problems. Employees who are finding things financially difficult are also more than twice as likely to have struggled to concentrate, and three times more likely to be losing sleep.
A quarter of the UK workforce are financially insecure: just because workers have a job, that does not mean they are financially secure. One in five employees (20%) report that they are just about managing, while a further 5% say they are finding things difficult. That is a quarter of the workforce, and for employers which pay low, or minimum wages, it is likely to be far more, perhaps even most staff.
In other words, any employer that wants effective staff needs to invest in mental and financial wellbeing, and that means taking seriously the sources of stress they may face. Reducing financial stress for staff could pay dividends in productivity, as well as improving lives.
And for those wondering what good looks like, here are three ideas for every workplace:
First, build financial resilience. Employers should explore providing both savings schemes and short-term loans through payroll, allowing a lower rate of interest to be offered and helping employees to avoid fees and charges.
Second, make it okay include training on problem debt and financial difficulty in management training and minimise the costs of participation in work to reduce stigma and ensure that employees in financial difficulty are not excluded from social or professional events.
Third, offer help once problems have set in. Support employees who are taking sickness absence to avoid financial difficulty by establishing reasonable sick pay policies, considering group income protection policies and by signposting to welfare advice where appropriate.
Polly Mackenzie is director at the Money and Mental Health Policy Institute
