Money and Mental Health’s Impact On The Workplace

The relationship between financial stress and mental health is becoming increasingly evident, especially in the workplace. As the cost of living crisis continues to affect individuals globally, employers are recognising the need to address both financial literacy and mental well-being among their staff.

Key Statistics and Findings:

According to a study by the Money and Mental Health Policy Institute, people who experienced mental health problems for three or more years were nine times more likely to have struggled financially compared to those without mental health issues.

The same study found that individuals with long-term mental health problems were eleven times more likely to have been out of work due to illness or disability.

Research shows that nearly 800,000 people experienced both long-term mental health problems and long-term financial difficulties between 2019-2022.

A significant income gap exists, with those experiencing long-term mental health problems earning on average £3,360 less annually than those without mental health issues.

Impact on Workplace Performance:

Financial stress can significantly affect an employee's ability to focus and perform at work. Here are some ways in which money worries and mental health issues manifest in the workplace:

1. Reduced productivity: Employees preoccupied with financial concerns may struggle to concentrate on their tasks.

2. Increased absenteeism: Financial stress can exacerbate mental health issues, leading to more sick days.

3. Higher turnover: Employees may seek higher-paying jobs to alleviate financial pressure, resulting in increased turnover rates.

4. Workplace tension: Financial stress can lead to irritability and conflicts among coworkers.

Personal Experiences:

To illustrate the real-world impact, here are some anonymous testimonials from employees that i’ve been working with recently:

"I've been struggling to keep up with rising living costs, and it's affecting my sleep. I find myself constantly worrying about bills during work hours, which makes it hard to focus on my tasks." - Marketing Executive, 32

"The stress of managing debt while trying to save for the future has led to anxiety attacks. I've had to take several mental health days, which makes me worry about job security." - IT Specialist, 28

"As a single parent, the financial pressure is immense. I'm considering taking on a second job, but I'm concerned about how it will affect my performance in my primary role." - Customer Service Representative, 41

What Employers Can Do:

1. Provide Financial Education Programs:

Offer workshops or online courses on budgeting, debt management, and saving strategies. Companies like PwC have implemented such programs and reported improved employee well-being and productivity. Good Money Tribe offers employers both virtual and face to face programmes to embed financial education in the workplace and equip employees with tools to achieve financial stability.

2. Offer Access to Financial Advisors:

Partner with financial institutions or independent advisors to provide confidential financial counseling to employees.

3. Implement Flexible Payment Options:

Consider offering earned wage access or more frequent pay cycles to help employees manage cash flow.

4. Create Emergency Savings Programs:

Implement programs that encourage and facilitate emergency savings, such as payroll-deducted savings accounts.

5. Promote Open Discussions:

Foster a workplace culture where financial well-being can be discussed openly without stigma.

6. Mental Health Support:

Provide access to mental health resources, including counseling services and stress management workshops.

The Role of Financial Literacy:

Improving financial literacy is crucial in addressing these issues. A study found that 88% of Britons lack confidence in their financial abilities, and financial illiteracy costs British households nearly £3,000 annually. By investing in financial education, employers can help employees make better financial decisions, reducing stress and improving overall well-being.

Expert Opinion:

Conor D'Arcy, Interim Chief Executive at the Money and Mental Health Policy Institute, states: "With the cost of living crisis coming hot on the heels of the pandemic, the last four years have been a car crash for many people's finances and mental health. Rates of mental health problems continue to be higher than before the pandemic, while the rising cost of food and other essentials have made finances a source of daily worry and anxiety."[3]

By addressing both financial literacy and mental health, employers can create a more supportive, productive, and resilient workforce. The investment in employee financial well-being not only benefits individuals but also contributes to the overall success and stability of the organisation.

So, if you’re an employer an committed to helping your staff with their mental heath and overall wellness, the next step is to speak to us about implementing financial literacy in your workplace.