How employees’ financial wellbeing impacts small businesses
Stress can have a big impact on all areas of life. Work-related stress can often spill over into our personal lives and vice versa.
It might come as little surprise that financial worries are a big contributor to the level of stress that people feel. A report by the Mental Health Foundation found that 22% of adults who reported stress cited not having enough money to meet basic needs as a source of stress1.
The impact of financial wellbeing on employees
Financial concerns and money worries are incredibly common and something that many people will have experienced at some point in their lives. One survey revealed that 77% of UK residents are stressed about money, with 14% saying that they worry about money every day2.
Employees’ financial wellbeing and money worries are not always confined to their personal lives. The stress and anxiety that it can cause can also affect them at work, whether that’s through lost productivity or absenteeism. One financial wellbeing survey found that 77% of employees say that money worries impact them at work3. Another survey found that the employees who reported having financial worries were 8.8 times more likely to have sleepless nights, 7.6 times more likely to not finish their daily tasks and 5.7 times more likely to have troubled relationships with work colleagues4.
The impact of financial wellbeing on small businesses
As well as having a big impact on employees, poor financial wellbeing can also have a big impact on businesses. The stress caused by money worries can result in employees feeling that they aren’t able to come to work, or not perform at their best if they do decide to go to work. A report by Aegon found that poor financial wellbeing costs UK employers £1.56bn each year through absenteeism and presenteeism5. The same report also found that 500,000 private sector workers have had to take time off in the last year due to their financial wellbeing, leading to a loss of over 4.2 million days of work5.
Small businesses can feel the effects of employee financial wellbeing in a number of different ways that could ultimately have a big impact on the business. A survey found that organisations felt the strain of poor employee financial wellbeing through reduced productivity (22%), loss of talent (22%) and higher short term and long term absences (both 19%)3.
Identifying when you or your employees may be experiencing financial worries
According to research by the Money Advice Service, more than half of all adults (55%) have experienced concerns over their own mental health or wellbeing because of money worries at some point in their lives6. As a result, they have put together a checklist which can help to identify the signs that may indicate if money worries are affecting you or someone in your teams’ mental health or wellbeing. These include:
- Change in mood/temper
- Increased tiredness or lack of sleep
- Being anxious, stressed or lacking confidence to directly contact the bank or financial service providers
- Spending more money than is available
- Not opening bills
- Feeling like there is a lack of control over my/their money
Tips to help manage stress
If you or someone in your team is feeling stressed, whether that be due to financial worries or work-related, there are a number of things that you could try to help alleviate feelings of stress. Dr Wendy Li, Psychological Health Lead Clinician at AXA PPP healthcare, recommends the following:
- Learn and practise relaxation techniques such as meditation or yoga for stress management.
- Exercise regularly and eat healthy balanced meals. Your body can fight stress better when it is fit.
- Try to organise and manage your time more effectively and minimise multi-tasking. Learn to limit appropriately and set boundaries to activities that would create excessive stress in your life.
- Try to minimise alcohol and drugs. Getting enough rest is essential to your body recovering from stress events.
- Spend time taking part in enjoyable activities which are positive to support stress management.
- Seek social support. Speaking to someone often helps relieve stress as you acknowledge your emotions.