11 Mar 2021

How the link between financial and mental wellbeing affects workplace mental health support

Covid-19 had a major impact on people’s finances throughout 2020. The impact of financial uncertainty on mental health are clear and tangible, and employers should be conscious of the impact that this has on workers. This is particularly evident in an unprecedented working environment where employees spend more time away from the traditional support mechanisms in the workplace.

The impact of financial issues on mental wellbeing in the workplace

Business in the Community’s (BITC) Mental health at work (2019) report found 34% of employees reported their financial situation negatively affects their mental health. Financial concerns were also reported as a main cause of stress at work by almost one in 10 respondents in the CIPD/Simplyhealth Health and Well-being at Work (2020) report.

The result of financial pressure on employees can be shown through increased levels of anxiety and stress, which in turn can have a negative impact on someone’s ability to carry out their work. CIPD statistics show that stress is a leading cause of short and long-term absence from the workplace, accounting for 38% and 46% of absences respectively. Financial worries lead to 1.63 million employees taking time off workevery year, according to Neyber’s The DNA of financial wellbeing (2019) report. Making it clear that the maintenance of mental and financial wellbeing should be a priority for employers.

What can employers do to help?

Employers have a key role to play in helping support the financial wellbeing of their workers. Implementing effective strategies to help alleviate the financial concerns of employees is critical. According to the CIPD, only 43% of organisations incorporate financial considerations into their wellbeing strategy, with almost a quarter not taking it into account at all.

The following should form the cornerstone of an employer’s strategy to support their employees’ financial wellbeing:

1. Help identify the causes of financial stress. Organisations should attempt to understand the basis of their employee’s financial concerns. BITC recommends that employers review whether there are any work-related causes that could be impacting employees’ financial wellbeing, such as pay, contract type, or shift patterns.

2. Provide the tools to support employees. Many employers already have a number of initiatives in place, for example pay advances, hardship loans, travel loans, Employee Assistance Programmes, Save As You Earn schemes or financial education programmes. These can greatly assist employees in making smarter financial decisions, which in turn will have a positive effect on mental health outcomes.

3. Openly communicate. Employers should be proactive in ensuring that employees are aware of the financial services available to them. Making these tools easy to access on intranets, and active reminders via email, newsletter or team meetings will ensure that employees have access to the tools they need, when they need them. Reducing the stigma of financial concern will enable these conversations. BITC found that only 36% of employees feel comfortable talking about financial difficulties at work, so fostering a safe environment to talk about financial issues, along with relevant support mechanisms is crucial.

4. Signpost to further help. While line managers or leaders should not provide financial advice, organisations can ensure that they are trained and prepared to signpost employees to internal financial services such as Employee Assistance Programmes, or external agencies such as the Money Advice Service, Step Change and Citizens Advice.

For more information on how you can support your employees’ finances and mental health, make sure to check out our guide on financial wellbeing, which covers all of the key statistics from our latest research with the CIPD. Download the guide here.

This article is provided by Simplyhealth.