It’s pretty safe to say that we live in uncertain financial times right now.
Whilst the Government stated in October 2018 that the age of Austerity was finally coming to an end, the ongoing saga of Brexit, the potential for an early election in the UK and many other global events are expected to have large impacts upon the British economy over the next decade.
Whilst the future for the economy is looking decidedly hazy, the finances of people in the here and now aren’t faring much better, either. From student debt to credit cards, the total UK credit card debt hit £70bn as of the end of 2017, and it doesn’t show any signs of slowing down.
BORROWING AND DEBT
Despite having the fifth-largest economy in the world, wages in the UK fell by 10.4% between 2007 and 2015 and this is a trend that has only recently started to be reversed. However, whilst the numbers in people's bank account may now be starting to climb, this is offset by the fact that what you can get for your money is substantially less than 10-15 years ago; with food costs on the rise and the price of utilities also increasing, too.
Rather than cutting back on lifestyle purchases or managing finances more effectively, the fall and stagnation of wages is leading to many people looking at ‘quick fix’ ways to boost their cashflow; with many turning to credit cards and loans to cover regularly monthly outgoings.
This is leading to a concerning cycle of borrowing and debt – and it’s a cycle which is increasingly difficult to break if your monthly income has stagnated or worse, stopped altogether.
POOR MONEY MANAGEMENT, POOR MENTAL HEALTH
With each average adult in the UK now owing around £30,600 on everything from mortgages to high-street store cards, recent research concluded the likelihood of having a mental health problem is three times higher amongst people who have debt compared to those without.
The same research also concluded that mental health issues such as depression and anxiety were amongst the most common mental illnesses people in debt experienced, whilst there was an even higher link between suicide and debt. Worryingly, it also found that people who had contemplated or committed suicide were eight times more likely to have been in debt.
It’s clearly obvious that money worries can be hugely damaging to the individual, but this can be amplified in a work environment and lead to some very damaging effects on the wellbeing of the workforce, too:
- Lost Engagement – workers stressed out by finances will often begin to lose engagement with their job or employers, which is obviously bad news for productivity, efficiency and growth.
- Presenteeism – businesses may have staff who refuse to take time off even when they’re clearly unwell. This could be because they need the work, scared of taking time off or are simply overworking themselves to make ends meet. Regardless, staff who continue to work when either mentally or physically unwell can be just as harmful to productivity as an absent employee.
- Bad Behaviour - stress has a knack of bringing out the worst parts of a person’s personality, and workers under strain may become easily annoyed when faced with day-to-day tasks or worse still, act aggressively or uncooperatively. This type of behaviour can easily ruin a person’s professional life but can also affect their personal life as well.
TIME FOR BUSINESSES TO STEP UP?
With the squeeze on public finances set to continue, it’s time for employers to step up and support their workers who may be suffering from financial worries. Whilst employers may not be able to offer bigger wage packets or prevent their employees getting into debt, providing them with access to financial, physical and mental wellbeing assistance programs can make a real difference in their day-to-day lives.
In addition, aiding with day-to-day costs - such as transport - can help provide that all-important financial wellbeing safety net that can help reduce the financial burdens of your employees and the associated mental stress, too.
Of course, positive money management is only a small part of good mental and physical wellbeing. To discover what businesses can do to ensure their workforce remains happy, healthy and productive, check out our complete essential online guide to health and wellbeing via the link below!