New research has uncovered a concerning reality – money worries are taking a significant toll on full-time workers, affecting both their professional lives and personal well-being. According to a study conducted by The Reward & Employee Benefits Association (REBA) in association with WEALTH at work, the financial concerns of employees are having a detrimental impact.
The study revealed that a substantial percentage of full-time employees are grappling with the adverse consequences of money worries. About 23% of respondents admitted to struggling to concentrate at work due to financial concerns, while 15% reported a decrease in their overall productivity. Perhaps even more concerning is the fact that 16% of respondents incurred debts for the first time in their professional lives this year, excluding mortgage debt.
These financial worries extend beyond the workplace and have a ripple effect on home life. A significant portion of employees admitted to losing sleep (28%), feeling embarrassed (26%), arguing with family and friends (18%), and even breaking down in tears (18%) due to financial concerns. These findings underscore the need for immediate attention to the financial well-being of employees, both at work and in their personal lives.
The research from REBA and WEALTH at work highlights a growing recognition among employers of the importance of addressing poor financial literacy as a key financial wellbeing risk. In 2023, 63% of employers acknowledge this, compared to 58% in 2022.
Furthermore, the survey emphasises that employers anticipate ongoing financial pressures, including high childcare costs (64%), rental costs (66%), high consumer inflation (75%), and energy prices (77%), all of which pose a risk to the financial well-being of their staff. However, it is worth noting that energy costs and consumer inflation are slightly less concerning than in the previous year.
While the research paints a stark picture of the financial struggles faced by employees, there is a glimmer of hope in the form of evolving employer responses. Employers are increasingly aware of the need to support their employees' financial well-being. In fact, 53% of employers intend to increase their financial wellbeing spending in the next year, and 44% plan to focus on addressing financial distress in the workplace over the next two years.
One noteworthy aspect is the growth in the number of employers offering independent financial education, guidance and advice. This support is set to almost double, indicating a shift toward more comprehensive assistance for employees. These initiatives are driven by the understanding that financial well-being is integral to improving broader employee well-being and achieving HR objectives like recruitment and retention.
The study also highlights the increasing importance of an aging workforce in shaping financial wellbeing strategies. Approximately 29% of employers expect an aging workforce to drive their financial wellbeing strategy over the next two years. Additionally, 44% of employers plan to provide targeted support for employees over the age of 55, particularly in terms of pre-retirement planning.
The research suggests growing support for savings products among employers, with a focus on pay-as-you-earn saving schemes, employee share plans, tax-free saving wrappers, and long-term incentive plans. Wage advance schemes are also becoming more popular, with 37% of employers planning to offer them in the near future. The number of employers offering financial education, guidance and advice is set to see a substantial increase, indicating a commitment to enhancing employees' financial literacy.
The research by REBA and WEALTH at work underscores the pressing need for employers to address the financial well-being of their workforce as money worries are not only impact employees' productivity but can also cause emotional and personal distress. Therefore employers should recognise the link between financial well-being and overall employee well-being and take strategic steps to support their staff.
