The impacts of financial worries amongst your employees can be significant to both performance and mental health. But there are step you can take to help.
The latest research from a workplace well-being platform has found that financial pressures have rocketed to become the number one cause of stress outside of work in 2023. While already a major pressure last year, it overtook relationships as a cause of stress, which now sits second.
It comes as no surprise given persistent inflation and the cost of essentials like groceries and energy.
Most employers will recognise that financial pressures and other forms of stress will negatively impact staff performance. So what can you do to alleviate the pressure, get them feeling better about things and performing for you at their full potential?
You, of course, are not immune to financial pressures yourself. We know it has been tough for many SME business owners. So we present some ideas hierarchically, with the simplest and cheapest for you first, scaling up to more advanced actions you can take, should you have the budget to do so.
The essentials
A good place to start is by performing a quick review to ensure that you are not part of the problem.
- Look at your wage rates to ensure they are fair for the work performed, and at least in line with National Minimum/Living Wage legislation.
- Mandatory pension autoenrollment has been in place for several years now. This means that virtually all employees should be contributing to a pension to aid their long-term finances, with contributions topped up by you and the government. Is this set up in your business?
- Are your payroll processes fit for purpose, consistently paying staff on time and the correct amounts.
The basics
Once you are sure you have got all the essentials right, there are some basics which most SME employers should be able to implement at no or low cost to themselves.
- Removing the taboo – Money and finances are topics that many people find difficult to open up about, and we all know bottling problems up leads to further stress. Within the confidence of one-to-one sessions, let them know that it is okay to talk about finances with you.
- Signposting to external support – Have some useful suggestions for external support to hand, ones you can signpost individually, or communally – say via posters. You may have your own life experience you can draw upon, but sources of external support will definitely be helpful, and take some of the burden off you. These could include government websites like the Money and Pensions Service, debt charities like Step Change, and Citizens Advice.
- Repaying staff expenses more quickly – If your staff pay for business expenses themselves and then claim reimbursement, check how quickly you repay them. Research from one payroll firm found that a quarter of respondents struggled to pay their own essential bills while waiting for their reimbursement. Can you switch from a monthly to fortnightly or weekly payment run?
Going the extra mile
Not every employer will be able to do more than what we have outlined already. However, if you do have some spare budget, want to help and recognise the investment in your business it could yield, here are some further ideas:
- Offering an Employee Assistance Programme (EAP). An EAP is pound-for-pound one of the most effective employee benefits out there – it offers a range of support helplines to employees in crisis, giving them somewhere to turn to, whilst not pushing you out of your depth.
- Arranging financial planning sessions. No one is really taught how to plan their finances in school, so can you arrange for a local financial planner to come in and go through the basics with your team.
- Adding new perks to a benefits package. Employee benefits packages often include staff discounts for certain retailers and leisure activities like gym memberships. When was the last time you reviewed your employee benefits?
- Having a contingency budget to offer employees a short-term advance on wages if they suffer an acute financial crisis. Make sure it is all agreed in writing if you do this.
- Offering more frequent pay rises or bonus payments if you can afford it.
Your helping hand
At The HR Dept we are your helping hand whenever you are experiencing people problems in your business. If this article has struck a chord with you and you need expert help to move forwards, please do get in touch with us, and also check out the Financial Well-being resource on our website.
