Few of us can afford to avoid thinking about money, but for some of us, particularly those of us on low incomes, keeping our heads above water is a constant struggle.
Unfortunately, there is a tendency on the part of some people who are not struggling financially to assume that those who do find it hard to manage are merely bad at managing their finances. In fact, those on low incomes are generally better at managing their budget and making their money go as far as possible. And while much of the national debate on this subject has focused on the unemployed, in our low-wage economy, those who are in work are increasingly finding it hard to manage.
Helping employees who are struggling financially is good practice for employers, both ethically and economically.
Research and experience tells us that people who are struggling with financial difficulties can experience negative effects in many areas of their lives, including health, family and work. Financial pressures increase the risk of mental health difficulties – one of the leading causes of absenteeism from work. And that is just the tip of the iceberg. Employees coming into work when they are not well enough to cope is a growing problem. Understandably, people who are under stress or experiencing mental health problems due to financial difficulties are not going to perform at their best when they are at work.
There is a clear need for employers to take steps to support employees who are struggling financially. This support can not only help to alleviate the employee’s immediate problem, but it can also show that the business values that worker, which can boost morale. There are three main ways in which an employer can help employees in this area:
- Employee Assistance can offer advice on finance.
- Workplace financial education focuses on how to manage money and explore options to increase income, from how to claim PPI to the importance of budgeting and saving.
- Employers can also offer information on possible alternatives, such as local or national benevolent organisations that may be able to offer help.
It is also important for employers to be proactive on this issue, taking the initiative to offer confidential support, making it clear to the employee that they can approach their employer for help and advice and that there will be no repercussions for taking up this support. Managers should be aware of potential problems and the full range of solutions that they can offer in order to be able to support their staff.
Our understanding of how financial pressures can affect employees has developed in recent years and it is an issue that employers can no longer ignore. By taking proactive steps, employees can help minimise the stresses caused by financial pressures, producing beneficial effects for their employees and their business.