Financial Stress Impacts Employee Performance – Study

Financial Stress Impacts Employee Performance – Study

Financial stress can directly impact employee performance, according to one new study. So as the cost of living crisis continues, employers need to ensure they are doing everything they can to support financial wellbeing in the workplace, including offering the right employee benefits and value-add services like Employee Assistance Programmes.

[Related reading: Cost Of Living Crisis: The Role Of Financial Wellbeing In The Workplace]

Employee Performance Wanes As Financial Wellbeing Worsens

Worrying about financial wellbeing is negatively impacting employees’ performance, a new study has revealed.

The survey from YuLife – carried out in March 2022 by YouGov – found that 80% of UK employees believe financial stress negatively impacts their performance at work. This figure rises to 88% among those who live in households with children. 

Despite this revelation, however, 66% of those polled said they would feel uncomfortable telling their employer about any financial stress they were experiencing. Yet almost half (49%) of workers feel as though their employer has an obligation to improve their financial wellbeing, beyond just legal obligations such as benefits and pension contributions.

This sentiment was even higher among younger individuals, with 64% of 18-24-year-olds and 69% of 25-34-year-olds stating it is their employer’s responsibility to improve financial wellbeing at work.

Sammy Rubin, chief executive and founder of YuLife, said: 

"The almost-universal nature of money worries means that employers have a responsibility to support their employees' financial wellbeing with additional benefits and insurance products as well as creating help and awareness to suit their financial needs.

"Employees increasingly believe that workplaces are responsible for improving financial wellbeing - it's no longer considered a nice-to-have but an integral part of creating a healthy workspace."

Many Expect Their Financial Situations To Worsen Over Next Three Months

Meanwhile, separate research has revealed the true extent of the current cost of living crisis witnessed across the UK.

According to the latest LV= Wealth and Wellbeing Monitor, which surveyed 4,000 UK adults in March 2022, 42% of people expect their financial situation to worsen over the next three months as the cost-of-living crisis continues to take its toll.

While 44% of respondents said they have already seen their finances worsen over the past three months, 58% stated that their total monthly outgoings have also increased. Just under a quarter (23%) have also seen their savings decrease over the same period. LV= noted that financial worries were greatest among retired people, with 65% of this group saying their total monthly outgoings have risen.

Clive Bolton, managing director of Protection, Savings and Retirement at LV=, said the survey results highlight how the "finances of millions of people are being squeezed by the large rise in the cost of living."

[Related reading: Financial Wellbeing At Work: Time To Review Your Benefits Package?]

***

The YuLife study in particular highlights the enormous impact financial stress can have on employees and it is their employers they are looking to for support. 

Contact us today to find out how you can start offering the right employee benefits and better support your workers’ financial wellbeing.

----------------

Author: Terry Fromant - Head of Group Risk