HR

Financial insecurity a distraction for majority of young employees

Praseeda Nair | 8 February 2017 | 7 years ago

Financial insecurity
Employers that make efforts to educate young workers over finances could’see improvements to productivity within a small business
Almost six in ten UK employees aged 18 to 30 years old are unable to concentrate at work due to financial insecurity, according to new research.

The study, undertaken by insurance provider MetLife, suggested that day-to-day money worries have become a growing issue for many employees. Almost 40 per cent of survey respondents admitted that they were living payday-to-payday.

Credit card debt among workers was recognised as one driver of financial insecurity, cited by over four in ten workers as a major causeof workplace stress.

The issue of family security was found to have increased in recent years. In 2015, some 43 per cent of employees were struggling against the sudden death of a primary earner. This year, that concern rose to 57 per cent.

A new report from consumer watchdog Which? has revealed that banking overdrafts could be a major cause of financial insecurity for younger staff, after the group released figures that showed over half of overdraft users at some point entered an unarranged overdraft with high rates of payback charges.

While payday loan companies have made headlines in the past over hefty charges, Which? claimed that a bank customer entering an overdraft for 30 days by 100 could face added fees of 180 by contrast, monthly payday loan fees are capped at 24.

For small business owners looking to educate over the dangers of debt, the study found that UK workers would largely be welcoming of initiatives to tackle financial insecurity, with over half interested in financial counselling at work.

Tom Gaynor, a director at MetLife UK, emphasised the benefits to workplace productivity for employers that actively engage with the wellbeing of staff.

we know that less stressed employees are more productive and creative and the business case to improve employees? financial wellness is more than just a simple act of benevolence, he said in a statement.

Gaynor added that there was a clear link? in how engaged employees are with their work and how in control they feel of their finances, with small business owners that approached the issue setto reap benefits to morale and productivity.

done right, it’s an opportunity to help employees become more focused at work and more engaged with their employers, he concluded.

How a small business owner can respond to the financial insecurity of staff

Speaking to Business Advice, David Price, managing director of Health Assured, advised employers on how to best confront the issue offinancial insecurity.

“It is in an employer’s best interest to support an employee with financial problems as they will invariably struggle to focus 100 per cent on their work, and may make mistakes or miss opportunities. The effect can be disastrous to any business, large or small, ” he said.

In terms of workplace schemes available to support staff, an Employee Assistance Programme (EAP) could be beneficial to a small business owner.

“An EAPcan be a significant benefit to those at risk of falling into debt or struggling with their finances. Many EAPs offer debt counselling or advice services. It is important for employers to regularly remind employees about the specific services available from the EAP and how they can help them.”

Price added that a focus on awareness would allow workers to make more informed choices regarding finances.

“Employers could also consider offering lines of credit and advice on how to manage money or workplace financial education, providing the tools employees need for their own financial education.These classes focus on making the most of existing income through better money management and savings plans.”

Keep reading to find out whether you are harming your employees? mental health without realising it

Topic

HR

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