An employee snapshot – how are your people feeling?

Empowering employees: tackling financial stress in the workplace

As the cost-of-living challenges continue for many employees, over half (56%) have found themselves in financial difficulty - almost three in four (74%) of employees feel stress, and of those people, over 75% said it was due to financial or work-related pressures.

Whilst levels of borrowing and saving are broadly in line with previous years, there has been an increase in employees struggling between paydays as costs continue to rise. As money becomes tighter, budgeting becomes more important, therefore many organisations are adding knowledge building (financial education) into their benefits strategy to help with these challenges.

From an employer's perspective, these pressures are having a considerable impact on the workplace with over half (52%) saying it’s impacting their job performance.

Employees impacted in the last 12 months

What can employers do to help employees?

  • Communication – ensure employees know what support is available and how to access it by using a range of communication methods.
  • Knowledge building – provision of educational sessions and interactive tools to empower employees to take control of their financial confidence.
  • Build financial capability and resilience – consider introducing workplace savings to help build financial capability; this can also be structured to support employee retention.

Financial pressure impacts employees everyday

The weight of money worries and concerns has a significant impact on everyday lives as well as employees' behaviour at work. To ensure employees are able to perform their job to the best of their abilities, we need to support their wellbeing from a holistic perspective.

Percentage of employees who feel financial pressure impacts their behaviour

Manage money effectively

Job performance

My self confidence

Make financial decisions

Stress

Employees who said that they had felt stressed in the last 12 months

Financial resilience

A key part of good financial wellbeing is the ability to cope should something happen, be that planned or unexpected. Rainy day savings is often the main source of financial support in these circumstances.

More than one in three (36%) reported having less than one month’s savings (including none); and one in five said they had no savings at all. This is broadly in line with what we saw last year.

The other side of this is the level of borrowing (excluding mortgages and student loans). More than three in five (63%) have borrowed for basic financial needs in the last year (again, consistent with 67% in 2023). The most common method is credit cards, borrowing from savings, or from family and friends.

When financial resilience is low, employees may need to seek additional income. They may not be able to be as flexible with work fluctuations, they could be distracted during their work time, and they could be tired which can have an effect on their ability to focus and perform as you require.

Lack of savings

High levels of everyday borrowing

2 in 5 are considering taking a second job in the next 12 months (42%)

Employees who feel concerned or negative and can’t cope with their finances between paydays

How can employers support financial resilience?

Building financial resilience isn’t necessarily about paying people more, it’s providing information and options to build good financial habits and helping make their money work hard for them.

This can include things such as workplace savings, retail discounts and protection against unexpected events.

You may well have some of these available in your benefits offering, but do your employees know what’s available, do they understand how they can help and how they can access them? Having a strategy of regular, targeted and clear communication can build awareness and understanding.