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Helping employees in financial distress

Helping employees in financial distress

Q: One of my employees is in a great deal of financial distress. How can I support them? 

Money is something everyone has to deal with directly or indirectly on a day-to-day basis. For some people, keeping their heads above water financially can be a constant battle. Being in financial distress has been linked with reduced mental health and wellbeing.

It is in an employer’s best interests to support any employee with financial problems as they will invariably struggle to focus 100 per cent on their work, and may make mistakes or miss opportunities. The effect can be disastrous for any business, large or small.

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The most common issue of financial distress is fatigue due to lost sleep through worrying about money problems. Another common issue is reduced cognitive ability due to financial anxiety, making concentrating and decision-making difficult.

The anxiety can even spill over into an absence issue, with 8 per cent of the UK workforce admitting to taking time off work due to financial stress. This results in an estimated loss of 17.5m working hours, equating to a £120.7bn loss for the UK economy.

Similarly to mental health, there are barriers to employees coming forward and asking for help or telling someone that they are struggling. Making this part of regular learning opportunities and including it among wider wellbeing activities can make it easier for employees to attend.

An employee assistance programme (EAP) can be a significant benefit to those at risk of falling into debt or struggling with their finances. Many EAPs offer debt counselling or advice services. It is important for employers to regularly remind employees about the specific services available from the EAP and how they can help them.

Employers could also consider offering lines of credit and advice on how to manage money or workplace financial education, providing the tools employees need for their own financial education. These classes focus on making the most of existing income through better money management and savings plans.

David Price is managing director of Health Assured