Talk Money Week: It’s time to normalize conversations about money at work
Financial distress hinders our performance and productivity at work
Financial distress is a major cause of stress and anxiety, which affects our performance and productivity at work. Research has shown that those who experience financial stress are more likely to take time off work, either because they need time to manage their personal finances or because of emotional exhaustion and related illness. to stress. A study highlighted in the new CIPD Evidence Review, to be published later this week, found that personal reasons typically caused two days of absence per year, with workers experiencing higher levels of financial stress reporting more days of absence. Financial distress can also lead to presenteeism, where people go to work but don’t perform by their usual standards.
Financial distress is the flip side of financial well-being: feeling secure and in control of your finances. It’s knowing that you can pay your bills today, that you can deal with the unexpected, and that you’re on the right track to a healthy financial future. Much like our mental and physical health, there is a lot of strong evidence to support the idea that employers play an important role in supporting financial well-being.
The most obvious role employers play in supporting financial well-being is paying a fair and living wage that helps keep people from getting into trouble in the first place. But that’s not always enough, and research shows there’s a lot more employers can do to help people feel more confident and empowered when it comes to money matters.
It helps to talk, but it’s not always easy
Many of us don’t like to talk about money – perhaps because of the stigma surrounding issues like debt and because financial well-being is tied to other sensitive issues like debt. mental well-being and absence from work. But incorporating financial conversations into our daily lives helps us build our financial confidence and resilience to deal with whatever life throws at us.
That’s why each year, Talk Money Week (November 8-12, 2021) encourages people across the UK to open up about their finances in order to improve their physical, mental and financial well-being. This year, the CIPD takes the opportunity to remind employers why they must implement a policy of financial well-being, which they discuss openly and regularly with their employees.
The new ICPD report finds that support services such as financial education, debt counseling, and holistic employee financial wellness programs can all be effective. However, it can be difficult to get people to engage in financial wellness initiatives at work. It is therefore important that business leaders encourage open discussion on financial matters by standardizing conversations about money. For example, by speaking openly about the money worries they have been confronted with or the financial situation of the organization more generally.
To help reduce stigma and make employees more likely to access help when they need it, HR teams can also use communication channels and encourage people managers to tell employees where they need help. financial well-being. Involving employees in developing your financial wellness strategy can also help break down barriers.
All employers, large and small, should have a financial welfare policy
Supporting financial well-being may seem like a big undertaking, especially for small businesses with limited resources, but any employer can begin to develop a financial well-being policy by following these three simple steps:
1. Let your employees know that they can get free, confidential, independent advice on money and debt from the government’s money and pensions department.
2. Make sure your staff are fully aware of all the benefits you are currently offering and how to get the most out of them.
3. Start a dialogue with employees and supervisors about the financial challenges and opportunities they face and the business. It will show your concern and help break the stigma associated with money issues.
For employers who have the means to do more, the CIPD recommends developing a more comprehensive financial welfare policy (integrated into a broader welfare policy), which includes the following commitments:
1. Pay a fair and decent wage to prevent people from falling into trouble
2. Develop a financial wellness program that helps protect employees from financial shocks. This can include multiple components, such as:
- give employees more control over their finances through hardship loans or access to earned wages
- social benefits that reduce the cost of living
- financial education that develops ‘soft skills’ of attitude, judgment and behavior – for example, making people more inclined to plan or save
- debt counseling for those in need, in conjunction with other supports
3. Communicate regularly about financial well-being through a range of channels, both to promote available supports and to encourage open discussion on financial matters.
4. Assess the financial well-being of employees, using proven metrics, to inform or prioritize actions
5. Make sure everyone in your organization knows why they get paid, what they get paid, and what they can do to increase their income.
What is clear from the evidence summarized in the new ICPD report is that developing a concerted approach to supporting financial well-being is not only in the best interests of employers, but is also something where they can make a real difference.