44% of employees claim they worry about money every day. Some research argues that financial stress is ever more common than other social, physical or mental health concerns. The damaging impact on employee engagement and productivity cannot be underestimated. Financial stress directly affects mental health, which is why all employers should take action towards it.
Financial stress and mental health
Can we talk about money and mental health in the same sentence? As it turns out, there is no mental wellbeing without financial security. It goes without saying that mental wellbeing and financial stress are intrinsically linked. Employees with debt issues are more likely to develop mental health problems that have a knock-on effect on their morale and motivation in the workplace.
Although debt or poor finances do not directly lead to mental disorders, constantly worrying about them does. The stress resulting from trying to figure out how to make payments on time and ensure a decent living can make many people highly anxious. Some other money-related issues that impact mental health are:
- Not having the confidence to manage finances in the long term
- Not being prepared for unexpected situations such as being dismissed from work, getting ill, or incurring sudden living costs
- Imbalanced monthly earnings and expenses (spending more than earning)
The implications of financial stress at work
Any stressor impacts employee productivity, regardless of whether it’s linked to work or not. Financial stress, in particular, can decrease performance at work. It leads to sleepless nights, loss of focus, decreased mental abilities (such as decision-making, reasoning, concentration) and constant anxiety.
Money-related worries can have even more serious implications. Data suggests that over 100,000 people in England attempt to take their own life due to overwhelming debt. Furthermore, out of those for whom money problems are not that unbearable, two-thirds of those who still struggle financially report at least one sign of poor mental health.
Employers have the power to reduce the impact of financial stress on their workforce. They can implement solutions and strategies to help employees better cope with financial difficulties.
How can employers contribute?
Encourage financial planning
Helping employees understand their financial situation, budget, and plan their expenses can be a great starting point to financial wellbeing. This can be achieved by doing some research, analysing one’s expenses, or consulting with a financial expert.
Teach stress management skills
Coping with financial stress can be similar to dealing with other types of stress in general. Employees can benefit from having emotional regulation tools and techniques that help them reduce stress. Employers can offer stress management resources that help their staff understand how to respond to crises, adopt a problem-solving approach, and manage their emotions in a healthy way.
Set up savings programs
Employers can set up an emergency savings account (ESA) that automatically deposits money through payroll deduction with the employees’ consent. The money can be withdrawn at any time, and can be a reliable support in case of an emergency. Knowing that there’s a safety net can help employees reduce financial stress in the long term.
Know the employees’ needs
It is worth taking the time to understand the financial needs of certain categories of employees. Younger people might have different spending and budgeting methods than older generations. For example, younger workers might need more support managing their salary, student debt, and other living costs in contrast to the older staff who are more interested in retirement plans. Understanding your workforce’s financial needs can help you offer more targeted support to reduce financial stress.
Offer mental health support
Regardless of the stressor, any individual within a company benefits from mental health support. Employers should ensure that everyone in their organization has access to psychological support. In particular, those affected by financial stress will greatly benefit from having a go-to person in times of crisis.
Practical tips
Before going to complex financial wellness programs, employers should not forget that even simple tips can change someone’s relationship with money. For example, if an employee spends £2.50 on takeaway coffee, they can choose to save this money and have £50 extra at the end of the month instead.
How can SupportRoom help you deal with financial stress?
If your employees are affected by financial stress, SupportRoom can help. We offer flexible mental health support for employees in the form of virtual therapy, self-help tools, and wellbeing monitoring. Besides, we allow leaders to monitor mental health trends in the workplace and see their employees’ main stressors. This way, you can implement changes and mental health initiatives knowing exactly what’s going on behind the scenes.
You can find out more information about SupportRoom here.
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