3 strategies to reduce workforce financial stress

Financial wellbeing continues to hit the headlines as the UK faces slow growth and some economic challenges. Financial stress among employees has emerged as a significant concern, affecting not only individual wellbeing but also workplace productivity and overall business performance.

Recent data from Stribe highlights the widespread nature of financial stress among UK workers:

• 59% of employees report that financial concerns prevent them from performing their best at work.

• 45% of workers lose sleep over money worries, leading to fatigue and decreased concentration.

• 52% of employees admit that cost-of-living pressures are influencing how they feel and perform at work.

Impact on Workplace Productivity

Financial stress affects various aspects of employee performance such as reduced productivity and being distracted by financial concerns. There’s also the issue of  an increase in absenteeism, with 4.2 million workdays lost annually due to financial distress, costing UK businesses approximately £626 million in lost output.

Effects on Employee Wellbeing

Financial stress doesn’t only impact productivity—it also affects employees’ mental and physical health. 

52% of employees report that financial worries have negatively affected their work performance

MHFA

80% of those facing financial stress report feeling anxious or depressed at least once a week, indicating a clear link between financial health and mental wellbeing.

Also, 45% of employees report losing sleep over financial worries, leading to fatigue and decreased concentration at work. The impact of the loss of sleep alone can seriously impact a team member’s ability to think clearly and to do their job effectively. 

Financial pressure is now the top external stressor, affecting 41% of employees in 2024, an increase from 37% in 2023.

Strategies for Employers

Employers can take proactive steps to mitigate the impact of financial stress:

• Financial Education Programs: Implementing workshops or resources to improve financial literacy can empower employees to manage their finances more effectively. These workshops can also highlight any other services you provide as an employer such as an understanding of their company pension scheme or medical insurance, giving rise to a feeling of being better cared for by their employer. People often forget these benefits that are available.

  Research by Pluxee found that 51% of employees are embarrassed about their financial literacy, and only 16% of workers said they felt supported in their financial concerns at work.

• Employee Assistance Programs (EAPs): Offering confidential counselling services can provide support for employees under financial pressure and related personal issues.Typically these can be very low cost but high impact.  Other programmes such as discount schemes are also increasing, such as travel season tickets, and other assistance such as employee share plans and mortgage brokering services.

• Flexible Options: Providing options such as salary advances or financial planning services can help employees navigate financial challenges. Not all flexible options are financial. Also consider flexible work times which may allow a member of staff to attend to their children without extra cost, or allow another family member to go to work.  

Conclusion

Financial stress among UK employees is a significant issue that affects not only individual wellbeing but also workplace productivity and business outcomes. Younger members of the workforce are particularly concerned about finances. With overwhelming and often conflicting advice available online,  it’s hard for them to consider a life when they feel financially secure. Employers who recognise and address this challenge through supportive measures can foster a healthier, more engaged, and more productive workforce.