11 February 2025
When it comes to protecting your business, insurances like public liability, professional indemnity, commercial property, and motor fleet cover are standard practices.
It’s easy to see the risk and the need to manage that risk.
But what about the risk posed by employees dealing with financial stress? How does this impact your business, and what can be done to mitigate these risks?
Employee wellbeing takes many forms. If employees are struggling financially, it can affect not just their physical and mental health but also their job satisfaction and relationships with partners, family, and friends.
In today’s economic climate, we’re recovering from high inflation, interest rates remain elevated, and getting onto the housing ladder is increasingly difficult. Social media pressures only add to the stress of keeping up appearances.
Currently, 69% of UK workers report being impacted by financial concerns (FairPlayTalks, 2024). 1 in 3 say that money worries affect their ability to focus at work (Money and Mental Health), and 36% have taken time off due to financial stress (Bippit.com, 2024).
From a business risk perspective, this could mean someone responsible for safety procedures is overly fatigued due to sleepless nights. Alternatively, consider an employee who wants to retire but cannot afford to, leading to frustration and disengagement. In more extreme cases, financial struggles could contribute to unsafe behaviours, such as a member of staff with a gambling addiction using their phone whilst driving or an employee seeking compensation after an industrial accident, that perhaps wasn’t actually an accident!
Financial wellbeing is crucial for both employees and employers, with implications that extend into the short, medium, and long term. Employees need to be focused and committed to perform well, and businesses need to safeguard their operations from any potential risks that stem from financial stress.
How Can These Risks Be Managed and What Are the Costs?
The first step to addressing financial wellbeing is to establish what can be done from money that the business has already budgeted for.
For example, when considering pay rises, could some of those funds be allocated to more cost-effective ways of supporting employees? There are several benefits, such as Salary Exchange or Discount Platforms, that may offer more value to employees than a direct pay increase at the same cost to employers.
Financial education can also help employees manage their money more effectively, potentially putting more funds in their pockets. The cost of financial education could even be covered by your Learning & Development budget, supporting life skills in addition to vocational training, and creating a more productive workforce overall.
Introducing personal finance support doesn’t have to be costly or resource-intensive. A pilot education programme can be a low-commitment, low-cost solution, that can help gauge how employees are feeling and where they most need support.
In more complex situations, additional funding might be required. However, we have extensive experience in building business cases using both external research and internal data tailored to your specific organisation’s needs. We can guide you through strategy, provider selection, and ongoing management and / or deliver independent expert education.
There are many proactive and preventative measures employers can take to mitigate people-related risks and protect their business.
We’d also love to hear from any employers about the challenges they’re facing with financial wellbeing or their experience with financial wellbeing providers. We are committed to continually improving our market knowledge and providing valuable insights to businesses.
For further information, feel free to contact Lee Coles, Senior Financial Wellbeing Consultant.
