Does your workforce earn a living?
Posted by Jane on Apr 18, 2019
Are your employees worried about making ends meet? If they are, so what? It’s tempting to wonder why should you care? After all, you pay them their contractually-agreed wages and other benefits, what more can – or should – an employer do?
In the current economies, global and national, there is ongoing discussion of living wages, workers below the poverty line, and so on. The reason that this should be of concern to any employer is that money struggles can be incredibly stressful and that kind of stress has a direct impact on job performance (and therefore the performance of your business).
A recent CIPD report, Employee financial well-being: practical guidance, notes that the cost to organisations of poor employee financial well-being includes:
- Increased stress, costing UK business billions in lost productivity.
- Absenteeism, as employees take time off due to stress (8% of the UK workforce according to Neyber in 2016).
- Reduced efficiency, as 18-19% of employees lose sleep due to financial worries.
- Impaired concentration, with 10% of employees finding it hard to focus or make decisions due to money management problems.
To sum up, according to employeebenefits.co.uk, 30% of employees would put money at the top of their worry list; yet only 50% believe their financial wellbeing matters to their employer.
These days, it’s not unusual to hear employers talk about employees’ physical or mental health, but economic health is a much more recent proposition. For employers looking to do more, try the following starting points:
- Check your current pay setup is in line with the legal living wage and national minimum wage levels.
- Review your benefits policy – is it offering the right benefits? Does the pension allow people to save for retirement. If you offer a menu of options, which ones are being taken up and which ones aren’t. And why?
- Ensure you’re communicating clearly about anything that might affect employee finances (including from the very start with the information you give to new hires).
- Point employes in the direction of impartial financial advice; consider accessing an awareness programme if there would be sufficient need or interest.
- If your employees are union members, engage with union representatives.
- In the same way that a health awareness campaign might inform employees about the benefits of exercise and good diet, consider events or initiatives that encourage better use of finances.
The CIPD guidance and supporting research suggests that poor employee finances are a significant risk to business performance, similar in principle to poor employee health. The case is clear for at least tabling the issue as a topic for serious consideration. And besides all the practical motivations, employers might also like to consider the ethical stance: it’s the right thing to do?
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