With nearly half of the UK currently borrowing money to make ends meet, it’s no secret that the cost of living crisis is putting immense pressure on people, and it’s going to get worse before it gets better.
I recently had a chance to chat with Clare Seal, Founder of The Financial Wellbeing Forum, author of Five Steps to Financial Wellbeing, and Glamour Magazine’s Money Matters columnist. Clare is uniquely posed to talk about these things, she’s been incredibly honest about her own struggles with debt, with her Instagram account @myfrugalyear now at over 85k followers.
We had a great chat about the effect of financial struggles on mental health, productivity, and what People teams can actually do to help.
Molly: There’s a really startling statistic that only 24% of employees think that their employer cares about their financial wellbeing, but 62% think that they should care. Why do you think the gap between these two stats is so large?
Clare: There’s definitely tension in the relationship with your employer around money. The cost of living is rising so much, so many people are working really hard, but also struggling to make ends meet. In these circumstances it’s tough for people to believe that their employer actually cares about their financial wellbeing, or will do things to help them improve it.
Molly: What are some of the mental health impacts on people dealing with financial stress?
Clare: It impacts all areas of your life - increased anxiety, low mood, no motivation. I know from personal experience that if people are trying to work and they’re getting calls from their bank at the same time, it’s impossible for them to concentrate on anything else. Also if you feel like you’re not being paid enough, it’s really difficult to feel any motivation, and it leads to resentment and ill feeling.
"Financial wellbeing is a big deal, and it’s getting bigger, so now is a really good time for companies to decide how they’re going to help."
Molly: What are some ways companies can encourage open and honest discussions about financial wellbeing?
Clare: Getting experts to speak is a really good first step. When I do talks and workshops with companies, I encourage people to open up about the silly things they sometimes do with money. Almost immediately you can feel everyone breathe a sigh of relief and become willing to talk about the mistakes they make - a lot of the stress we put on money is comparing ourselves to colleagues!
Some other really useful things are compulsory sessions with pension providers. I personally have found them really useful - and was glad my company made them compulsory! There’s a tendency (especially with younger people) to put this to the back of our minds, but it’s really really important to be informed on why they matter, and why we should prioritise putting this money in when we’re able.
Molly: And for the most important question… What can employers actually do to help people improve their financial wellbeing?
Clare: Having speakers, financial wellbeing coaching, and generally educating people is really important.
"But the bottom line is, you have to pay people a decent amount!"
Clare: Pay rises are a very different process from company to company. But ultimately, if you want employees to feel like you care about their financial wellbeing, you have to pay what they’re worth and not just what they will put up with.
Another thing is the culture around salary reviews. I’ve worked in companies where I felt I had to fight tooth and nail for one, but the process needs to be much more transparent. You should be able to feel confident that if you’re performing well, you aren’t going to be strung along on the promise of a salary review. And what else are you offering that’s going to help people financially? A great maternity/paternity policy is massive, as are other healthcare benefits, subsidies, home office allowances etc.
This might seem like a really small one but I also passionately believe that all employers need to have a very speedy expenses process. £100 for a train may be nothing to a company, but it could push an employee into overdraft, and then they’re paying interest on that. There’s plenty of apps such as PLEO which allow this process to be sped up. Consideration on seemingly small things such as expenses, shows that you actually care!
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