According to a recent study by financial planning advisors, Neyber, ‘money worries’ is now cited as the #1 concern for UK employees, and it’s costing employers an estimated £15.2 billion a year due to:
- Absenteeism – because financial stress has such a negative impact on health.
- Presenteeism – where employees attend work even though they are unwell or unfit for duties, resulting in a decline in work performance.
- Reduced productivity due to employees using worktime to resolve financial concerns or spending their time at work worrying about money.
- Staff turnover due to financial worries.
The study also revealed that only one-third of the 11,000 employees surveyed felt their employers were providing a supportive environment for their financial health.
There has been a growing interest in financial wellbeing in recent months following the rise in interest rates, inflation and the cost of living, on top of the fallout from COVID-19. Wage increases have simply been unable to keep pace.
Research additionally conducted by University College London for its COVID-19 Social Study found that almost four in 10 people (38%) are worried about their finances – up from 32% in January and the highest figure since the beginning of the coronavirus pandemic.
Add to this a recent Chartered Institute of Personnel and Development (CIPD) survey of employers which found that, among employers with health and wellbeing strategies, only 11% actively focused on financial wellbeing while 57% actively focused on mental wellbeing.
If employers are serious about improving engagement, it is vital to first identify and address the chief concerns of your employees by simply listening to what they have to say.
However, one company I know that is taking a firm proactive stance to support its employees through the escalating financial crisis is North Star, an award-winning, not-for-profit housing group located in the North-East of England. North Star has been taking a serious look at the effect that financial distress is having on its employees and their work output – and it is a good example of how employers can be helping their staff/ workforce through these difficult times, as I will explain.
I first came across North Star two years ago when they wanted to use Peach Mondays’ ‘employee listening’ platform as a way of engaging with employees during the 2020 Covid-19 lockdown. The company was looking to boost morale, camaraderie and team spirit, and generally help everyone in the team feel more connected.
Scroll on two years, and North Star was using the platform again – but, this time, to find out how best to support its employees through the deepening financial crisis. North Star was keen to avoid making assumptions when it came to the financial challenges its staff were facing. So, a survey, focused specifically on financial wellbeing, was how it could find out whether it needed to be doing more to support them. North Star would ask the questions, and then listen to its employees’ responses.
Carole Richardson is North Star’s Executive Director of People and Culture, and she told me: “People are at the forefront of everything North Star does. We invest in communities and focus on improving outcomes for our tenants – and this dedication extends to our company culture, the resilience of our employees and their financial wellbeing too.
“Given all that’s happening with escalating costs of living, fuel bills and national insurance increases, we were genuinely concerned that some people in our own organisation might be struggling to cope financially. We have a very high percentage of female staff and around 20% of our employees are single households – and studies have consistently shown that financial wellbeing is related to gender and family status.
“So, we wanted to engage and ask staff specific questions around financial resilience. Questions like: Do you have money left at the end of the month? Are you confident you could manage an unexpected financial event? In our experience, most people will want to engage with a timely and agile survey.”
In fact, over 80% of North Star’s staff (83%) engaged with the financial wellbeing survey – which meant North Star was able to get a fully comprehensive understanding of how the financial crisis was impacting its employees and their work output.
Armed with this knowledge, North Star was then able to develop an appropriate support framework tailored specifically to their employees, which has included:
- A Salary Advance Scheme of up to £500 to help staff with unexpected or unbudgeted costs
- A Salary Sacrifice Pension allowing staff to use the savings they make on NI contributions to either increase take-home pay or increase pension contributions at no extra cost. This is an HMRC-approved approach to pensions.
- Funding access for staff to a totally independent provider of financial education and coaching. Provided by the Centre of Financial Education (CFED), It does not sell any financial products or provide financial advice but helps people to be aware of their options and make better educated decisions for themselves. It can help inform thinking about mortgages, credit, insurance etc.
- Signposting staff to financial advice, ethical financial support, affordable credit and debt management services
Of course, the survey questions and the outcomes will be different for every company with an individual workforce and needs – but the advantages of an ‘employee listening’ platform never changes. It allows you to listen better and act faster to drive engagement and effectiveness – and both employers and their employees can benefit greatly from a well-developed financial wellbeing programme.
As Carole Richardson says: “This isn’t just about doing the right thing by your staff. From a business standpoint, it makes complete sense too – because, in the current employment market, employers need to be doing even more to retain good staff. And so, at North Star, we are keeping the conversations going, feeding the results back to staff and talking to them about the issues that arise. Because it is important for staff to know how greatly they are valued.”
Indeed, we need to be asking our staff the questions and listening to their answers in order to best support them at all times. And certainly now more than ever.