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Money Worries Burden One in Four Employees

The New Year inevitably acts as a trigger for people to face up to festive spending splurges and plan for the future. CIPD research, published January 2017, reveals that a quarter of UK employees are battling with financial anxiety and it’s impacting their ability to do their jobs. One in five (19%) are losing sleep at night because they’re worried about money and say that physical fatigue is affecting their concentration at work.    financial-wellbeing

Cost to organisations of poor employee financial well-being (CIPD 2017)

Employee absenteeism
• Higher levels of financial stress can result in higher absenteeism, which damages productivity (Willis Towers Watson 2016), with 8% of the UK workforce admitting to taking time off work because of financial stress (Neyber 2016).
• 6% of employees report having had health problems due to money problems (CIPD 2017).

Employee mental health
• Employee mental health problems have an estimated total cost to UK employers of £8.4 billion a year in sickness absence and £15.1 billion a year in reduced productivity at work (Sainsbury Centre for Mental Health 2007). Employee stress levels
• Financial stress costs the UK economy £120.7 billion and 17.5 million hours were lost because of absence from financial stress (Neyber 2016).
• Using the UK retail sector as an example, stress attributed to concerns about personal finances cost the industry an estimated £7 billion because of employees taking time off work and 1.7 million hours are lost through employees taking time off because of financial stress (Neyber 2016). This will have an impact on employee engagement.

Employee job performance
• For every £1 million an organisation spends on payroll, there is an estimated 4% loss in productivity due to poor employee financial well-being (Barclays 2014).
• Around 18–19% of employees lose sleep worrying about their finances (Barclays 2014, CIPD 2017) and disturbed sleep patterns contribute to lower employee productivity. Surveys at four US organisations estimated that fatigue-related productivity losses cost $1,967 annually per employee (Rosekind et al 2010).
• 25% of employees state that money problems have affected their ability to do their job (CIPD 2017).
• 8% of employees have spent time during the working day dealing with money problems (CIPD 2017).

Employee decision-making and focus
• 10% of employees have found it hard to concentrate/make decisions at work because of money worries (CIPD 2017).
• Reduced cognitive performance at work, because employees experiencing financial anxiety are slower to process financial information (Shapiro and Burchell 2012). It is proposed that this bias may have a negative work impact for individuals undertaking financial tasks and an impact on the quality and creativity of employee decisions may negatively affect business performance.

To help employers promote and actively support financial well-being, the CIPD have produced new, practical guidance. In conjunction with the CIPD, SYLO Associates can offer guidance to help you to develop a financial well-being strategy, or to refine what you are already doing. Or if you would like to assess your employees’ needs, identify the action you need to take, and evaluate the impact of your investment, please email Sarah or Sally for an initial consultation.