The UK government were calling it ‘Freedom Day’ – the day when all Covid-19 restrictions would be lifted after two long years.
To be honest, even though Thursday 24th February was also my birthday, it felt the furthest thing from a Freedom Day that I had ever experienced in my HR career. As one newspaper headline summed it up: ‘The sun is shining, but we’re keeping our umbrella’.
That morning I had taken a call from a HR director who was talking about the pressures her colleagues were facing. Change and uncertainty were causing stress-related absence to spike like never before and, for the first time, her Board had asked about employee financial poverty.
She wasn’t alone – it was the third call I’d had in a week where financial impact was the number one topic of concern.
For years financial poverty has been a ‘dirty little secret’ in many boardrooms – known about, but never really aired in public.
The CIPD recently published data in partnership with the Joseph Rowntree Foundation that 1 in 8 UK workers are in financial poverty. While research by financial wellbeing platform Wagestream has shown that 75% of the UK workforce have volatile and unpredictable pay, 50% run out of money before payday, 39% are not comfortable managing money, and 11.5 million have less that £100 in savings.
When financial issues are experienced, there is a direct link to mental and physical wellbeing with an impact on absence. If employees are worrying about money or covering up concerns this can also lead to a negative performance of up to 30% in productivity.
In short, the moral case and business case for acting on financial poverty is compelling.
Over the past two-years’ the world has experienced a profound economic and social shock that has affected businesses and individuals alike. And the war in Ukraine is adding to heightened emotions of fear and distress as well as accelerating an increase in the cost of living – all of which are being highlighted in news, on social media and in every conversation, by the hour!
Now more than ever, it is critical to scrutinise whatever insights and data you have within your organisations thoroughly, to work out who is worst affected. Use the data determine how the trends are changing or have changed and get a plan of action in place to support your colleagues. Where data is light, or insights are not easily accessible, look internally and externally for support, advise and solutions.
Being aware of employee financial poverty it is no longer good enough. You need to demonstrate that you understand workplace poverty and engage in a conversation across the business about what is driving it and how it feels to be in financial difficulty. Only then can you start to put meaningful solutions and practices in place to help.
In my experience, the core to financial freedom begins with education on money health. It’s a topic that I was never taught at my school or in business. But increasingly it is coming onto the agenda of wellbeing, and rightly so. It’s never too late to start educating – and your employees will welcome your support.
Many HRDs and organisations are looking at external solutions to support their efforts on this topic. There are some really great technology-based solutions available which can help give employees ‘power over pay’.
I’m engaging more and more on this topic happy to share my knowledge and insights about the impact it has on wellbeing and inclusion as well as wider People Strategies.
It’s a conversation that is not going away, and it will require a dedicated focus if you are to retain your talent, maximise , workforce productivity, and demonstrate your understanding of what is , going on in everyone’s lives right now.
As I write this, I’m few days older, perhaps a little wiser, and the sun is streaming through my window. But I am acutely aware of the need for umbrella!
Copyright OrgShakers: The global HR consultancy for workplace transformation founded by David Fairhurst in 2020