It’s December! The decorations are going up, elves are on shelves and the last-minute dash for festive gifts is in full swing.

Whilst many people believe this is the most wonderful time of the year, it’s not the case for everyone. In fact, the festive holidays can be tough on financial wellbeing – especially if money’s tight already.

The simple fact of the matter is that the winter holidays can be decidedly expensive. Gifts, food, travel, entertaining… it all costs money. And once the celebrations are over and everyone returns to regular grind, it’s likely there’ll be many people facing a mountain of debt.

suffering staff poor finance wellbeing

The truth is that more and more of us are struggling to keep pace with the cost of life, with recent data from Equifax showing that applications for credit doubled between November 2020 and August 2021. This would indicate huge numbers of people are relying on credit more than ever – be it to make ends meet, or simply treat themselves.

This also begs the question: are there people putting themselves into debt just to celebrate the winter festivities this year, or are more and more of us struggling with our finances? And what does this mean for HR?

Celebrating could put vulnerable personal finances under more pressure

Looking at the wider picture, the finances of people across the UK aren’t faring well. Data from the Office for Budget Responsibility’s November 2020 forecast indicated that household debt of all types, secured and unsecured, is forecast to rise from £2.062 trillion in 2020 to £2.373 trillion in 2025. This would make the average household debt in the UK a staggering £83,308.

In addition, the Bank of England warned that some households, particularly those with unsecured debt, reported being in financial difficulty during the COVID pandemic, and will be more vulnerable to future financial shocks.

So, whilst there are undoubtedly many people splurging this winter, more and more will most likely be resorting to credit to do so. This means they could be opening themselves up to huge amounts of pressure should their finances already be tight, their circumstances unexpectedly change, or their debt becomes unmanageable.

Poor finances, poor personal wellbeing

Suffering from debt can be a horrible experience. Research has found that the likelihood of having a mental health problem is three-times higher amongst people who have debt compared to those without.

Despite overwhelming evidence showing how debt and poor finances can negatively affect mental health, money is still seen as something of a taboo subject for discussion. So, with finances and debt being a highly personal and private topic for many people, should HR professionals really be taking an interest in the financial wellbeing of their employees?

Why should HR care about the financial wellbeing of their staff?

Clearly, money worries can be hugely damaging to the individual. However, in a professional environment, these negative feelings can be amplified even further – especially if employees are working in a results-driven, time-critical or pressurised environment.

An employee with money worries is likely to exhibit one or more of the following characteristics:

  • Disengagement – Employees who are suffering financially can become disengaged from their job or employers. This is obviously bad news for productivity, efficiency and growth – all the good stuff that makes a company tick.
  • Presenteeism – It might become apparent that an employee is continuing to work even when clearly unwell. This could be because they’re fearful of taking time off or are working every hour they can get to make ends meet. Either way, an employee who continues to work – be it remotely or on-site – when mentally or physically unwell can damage a company’s productivity and their own long-term health, just as much as an absent one.
  • Poor workplace behaviours – It’s been shown that high levels of continued stress can bring out the worst in people’s personalities. This can include angry or hostile tendencies, aggressive behaviour and a drop in both the standard and efficiency of

What HR can do to support positive financial wellbeing

As an HR professional, you’re not responsible for how your employees spend or manage their money.

However, it’s often the case that a lack of financial literacy is a huge barrier to employees achieving better financial wellbeing. With that in mind, there is a lot HR can do to support their employees in making more informed and positive decisions when it comes to managing their money.

Simple initiatives HR can implement include:

  • Provide access to financial education and guidance

An easy first step is to set up an employee portal where you can share links to reputable sites that provide information on all things financial. For example, the government’s Money Helper website aims to support better-informed money and pension choices and has a section specifically targeted at dealing with debt.

  • Hold financial wellbeing workshops

Just like supporting employees with their career learning and development, HR teams could look to provide workshops that provide opportunities for financial learning and development. Workshops can be a great way to get your employees more aware of their own financial wellbeing; plus, they can be an interactive and fun experience for participants.

As I mentioned earlier, talking openly about personal finances still has something of a stigma attached. An engaging workshop that encourages meaningful conversations is a great way to break that stigma.

  • Invite guest speakers

Alongside any financial wellbeing workshops, you might look to bring in a guest speaker or expert panel to talk about an aspect of financial wellbeing, money management or guidance.

If your staff are mostly working from home or remotely, why not organise an online event where you can invite your employees to ask financial questions in real-time to an expert panel?  Again, this is a great way to break the stigma of discussing financial worries and can also help your employees ask the big money questions they may not be comfortable talking to friends or family about.

  • Review your employee wellbeing programme

Going a step further, look at whether financial wellbeing benefits could form a part of your company’s employee engagement strategy. You might consider giving your employees access to financial assistance programs, or perhaps you could look at introducing an employee loan scheme?

These would obviously require a great deal of thought and investigation before implementing, but offering this type of support to your employees would certainly show that as a business and an HR team, you want to help protect and maintain their financial wellbeing.

Paul Bauer author image

Paul Bauer

Paul Bauer is the Head of Content at Cezanne HR. Based in the Utopia of Milton Keynes (his words, not ours!) he’s worked within the employee benefits, engagement and HR sectors for over four years. He's also earned multiple industry awards for his work - including a coveted Roses Creative Award.