Ease the pain: 4 tips for employee debt management
The Government may have just announced an extension of its price guarantee scheme - designed to cap energy bills at £2,500 a year for an average household - but the impact of rising costs across all areas of our economy is still having a huge negative effect on households across the UK.
And if a household already has debt, the impact may be even more catastrophic.
Christians Against Poverty (CAP), a charity that provides free debt advice and debt management schemes, reports that they have seen a 27% increase in the number of clients sacrificing meals in order to pay back debts. The first five months of 2022 saw a 40% rise in calls to their UK helpline.
And the subsequent impact on mental health has been acute. CAP reports a 70% rise in cases of depression amongst their clients and an 80% increase in anxiety. The most heartbreaking statistic reveals that there has been a 29% increase in the number of CAP clients contemplating suicide before seeking financial help.
Debt is a reality for many households and many employees. It is an understatement to say that financial struggles negatively impact job performance and overall well-being. One report estimates that 8.2 million employees are less productive at work because of stress caused by financial concerns.
As an employer, what can you do? How can you help employees who are struggling with debt, not only to improve their wellbeing but in order to ensure their productivity at work?
In this blog, we'll share four tips that could help ease the pain, anxiety and impact of debt on employees and their households.
A quick fix won’t work
Before we delve into our top tips though, it's essential to address a common misconception: trying to support employees struggling with debt won’t improve their wellbeing unless it forms part of a larger workplace wellbeing strategy.
People are complex creatures, and our wellbeing is determined by a variety of factors, factors such as:
- Physical wellbeing (e.g. our health, sleep quality and fitness)
- Social wellbeing (e.g. the extent to which we feel accepted amongst our colleagues and peers)
- Mental wellbeing (e.g. our stress levels or how happy we are)
- Financial wellbeing (e.g. the extent to which we feel financially secure)
Such is the complexity, we believe that workplaces need to build comprehensive workplace wellbeing strategies to ensure employee wellbeing.
It might be that you already have such a strategy. But is it covering all bases? Is it catering for all your employees equally, regardless of their background or age?
To help, we’ve created a Workplace Wellness Guide.
In this Guide you will be able to:
- Audit your existing wellbeing strategy.
- Use a step-by-step process to build (or edit) your existing strategy
- Learn about why wellbeing is important to overall business success.
Let’s now look at some of the top activities you could do as part of your strategy once your audit has been completed.
Talk to us
If you would like to find out more about our solutions, get in touch.
1. Provide financial education
One of the most effective financial wellbeing employee benefits that can help employees manage their debt is Financial Education. This online platform provides educational resources that cover topics such as budgeting, saving, and managing credit. By providing your employees with the knowledge they need to make informed financial decisions, you can help them avoid or reduce debt and improve their overall financial well-being.
Interested? Find out more
2. Offer flexible work arrangements
For many employees, paying back debt can mean they struggle to find money to spend on other bills. Offering flexible work arrangements, such as flexible schedules or remote work options, can help employees manage their money more efficiently (as well as reduce the stress, anxiety and depression they may be feeling).
Savings made from reducing how frequently they are commuting can provide a welcome top-up for other budgets that may be under pressure when a household has debt. With less money going towards travel expenses, more money will be available for energy bills and food.
This can reduce stress and anxiety and help employees stay focused and productive on the job.
3. Provide employee assistance programs
As we have seen, financial worries can really affect a person’s mental wellbeing.
Employee Assistance Programs (EAPs) are programs that provide employees with resources and support for a variety of personal and mental health issues. EAPs can offer counselling services, and other resources to help employees manage stress, anxiety and other mental health conditions.
By providing EAPs, you can show your employees that you care about their overall well-being and are committed to supporting them through challenging times.
Interested? Find out more
4. Offer debt advice services
No one likes to talk about money.
And this is particularly true when you’re struggling with debt.
How can employers help those who need it when people generally keep their financial struggles to themselves?
An easy way is by offering employees access to online debt advice services.
These platforms give instant online debt advice, tools to provide immediate recommendations based on an individual’s personal circumstances and allow users to speak to trained debt advisors via phone, email or live chat. All from the comfort of your own home.
By providing these services, you can help employees manage their debt and improve their financial situation, privately and without time constraints.
Interested? Learn more
Ease the pain, invest in your business
Debt can be a significant source of stress and anxiety for employees, which can negatively impact their job performance and overall well-being. By providing financial support for employees such as financial education and offering access to debt advice services, you can help employees manage their debt and improve their financial situation. By investing in your employees' financial well-being, you're investing in the success of your business.
