Andrew Kinder: How can EAPs support staff suffering from financial stress?

Managing money is something that, for many employees, is easier said than done.

Some people have no trouble in managing corporate finances and other people’s assets, while others really struggle when it comes to their personal finances. In simple terms, they can get into quite a mess. 

Andrew Kinder

The process of getting out of such a mess can really affect employees, perhaps resulting in lack of concentration, sickness absence, low confidence and other knock-on social issues, such as substance misuse and relationship breakdown, particularly for individuals with serious debt issues.

There is also the impact on society at large. For example, the Trussell Trust, which operates food banks around the UK, announced recently that it gave emergency food to 346,992 people in 2012-13, including 126,889 children.

From an employer’s point of view, support and information on this important issue is vital to minimise the impact on staff and, ultimately, their work. But for many employees affected by debt or other personal finance problems, the stigma associated with poorly managed personal finances is a significant factor that prevents them from seeking help.

Personal situation

This is where an employee assistance programme (EAP) plays a valuable role in offering employees access to a confidential service that enables them to talk about their personal situation and helps them find a solution. It is estimated that one in 20 employees using an EAP are seeking debt support and advice, although this number may actually be higher considering the link between debt and other issues, such as mental health or relationship problems. 

The very nature of an EAP, with its ability to quickly offer counselling services to employees who are stressed because of debt and money worries, means that individuals can rapidly start to get help and reduce the stress they are experiencing, even though it may take a little longer to resolve its financial causes. 

The vast majority of EAPs have close links with debt management organisations and specialist charities, so, in addition to psychological assistance for stress and other conditions caused by financial worries, staff can quickly be put in touch with professionals who are equipped and experienced to tackle the underlying financial issues.

Clearly, explaining the service is vital if employees are to access the support and services they need to address their financial problems. A partnership between the employer and the EAP is important to ensure communications are targeted effectively.

For example, this type of financial education and awareness programme could be linked to changes in the business, such as relocation or a corporate change in overtime policy. Or it could be linked to changes in pension legislation or developments in an employee’s personal life, such as parental leave or pre-retirement planning.

Communication needed

Also important is more general communication around the availability of EAPs to help with any issue that is affecting an employee and their work. The investment employers make in EAPs can only pay off if employees know how to contact the service and have a basic understanding of how it can help.

It is certainly true that employees who contact an EAP when they have a significant problem are harder to help than those who need some quick help and guidance to get back on track. For those with significant personal finance issues, such as major debt, the focus and advice may be about how to deal with bailiffs or discussing the implications of bankruptcy versus setting up an individual voluntary arrangement (in England and Wales). 

It may be surprising to learn that there are still many cases of employees paying very high charges on debts of over £50,000 because they are using multiple credit cards or payday loan companies. This simply results in them sinking further and further into debt.

Overcoming stigma

Personal debt issues can affect not just employees, but also their employer. Because of the perceived stigma, staff often contact an EAP at quite a late stage and, although help is at hand, earlier involvement would significantly reduce the distress for the employee and lessen the impact on the organisation.

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Employers need to review how they deal with debt and money worries and plan, with their EAP, further promotion of the services available in which confidentiality is assured. Then, when employees do experience financial stress, they will be motivated and confident to contact their helpline and ask for support before things get too much.

Andrew Kinder is chair of the UK Employee Assistance Professionals Association