Four ways SME’s can help staff with Blue Monday & money worries – without giving payrises

Neyber, the financial wellbeing company, says that one of the main reasons people feel low on Blue Monday is because of money worries.

Heidi Allan, Head of Employee Wellbeing of Neyber, said:

“Blue Monday was a PR stunt formulated in 2005, but it’s as relatable as ever today. Low light and poor weather means January feels grey. Christmas debt is often high and the reality hits employees over the difference between their pay and their outgoings – and how they’ll make it to the next payday without adding more debt.

“Many people turn their thoughts to getting a new job with higher pay – or asking their boss for a payrise. But in reality, a small increase to someone’s pay is unlikely to deliver a sustainable or long-term solution. What is incredibly useful is helping people to break the borrowing and debt cycle and improve spending and saving habits to get stronger financial health and resilience. Indeed, by consolidating debts people can save on average £101 per month.”

For employers this problem is significant. Six in 10 employees said their behaviour changes when they are under financial pressure, according to Neyber’s DNA of Financial Wellbeing 2018, which polled 10,000 UK employees and 500 employers. This number increased to more than 7 in 10 for those aged under-34. Forty-five percent said that money worries affect their job performance and 40% said they affect their relationships at work. Employers are aware of financial worries causing changes in their employees. Sixty-eight percent agreed that this affects individuals’ behaviour, 69% their performance and 67% relationships at work.

When employees worry about money it can lead to stress, mental health issues and extended absences from work. In fact, financial stress costs UK businesses £120.7 billion ever year.

Neyber recommends four ways for businesses to help their staff get past the blues and onto brighter times:

Help employees with debt:

According to Deloitte, UK consumers were expected to spend around £567 each on Christmas in 2018. Given that the UK average take-home pay is around £1,800 each month, paying for Christmas will eat up nearly a third of a month’s disposable income. However, much of the cost will have been loaded onto credit cards – uswitch estimated that around £8.5bn was piled onto plastic to pay for gifts and entertaining over the festive season. That means there will also be interest rates to factor in – so 2018’s expenditure could be hanging over employees well into 2019. Helping employees consolidate debts into a single, manageable sum each month could help them to manage their loan payments more easily and avoid excessive interest charges.

Offer financial education:

Just after Christmas, the Advertising Standards Authority upheld a complaint against payday loan provider Provident, ruling that a marketing campaign for loans with an APR of 535.5 per cent was irresponsible in its use of photos of children and families at Christmas**. The ASA ruled the advert was likely to play on individuals’ emotions, especially if they were already struggling to afford the cost of Christmas. Financial education at work can help employees to understand that high-cost loans are an expensive way of accessing money that is likely to push them further into debt. It can also help them to access more affordable products to limit the long-term effects of borrowing.

Plan ahead: 

Financial wellbeing is about being in control of your finances, rather than simply spending less or saving more, so helping employees to plan ahead for major expenses across the year could help to alleviate the gloom next January. Offering access to workplace savings accounts, such as ISAs and helping staff to develop good financial habits, such as budgeting and saving small, regular amounts, can deliver change that lasts for life (and not just for Christmas!).

Get comfortable with financial wellbeing: 

Neyber’s research also shows that 43% of HR directors don’t feel equipped to help if an employee approaches them about financial problems. And only 3% of employees said that they would approach their HR department if they had a financial problem. However, the workplace is an ideal place for employees to get help with their finances – or at the very least as a gateway to sources of support, such as Employee Assistance Programmes and affordable loans.

Heidi Allan continued:

“Businesses can support their staff and help them on the savings journey, or risk a workforce that suffers from financial stress, leading to high levels of absences and lower productivity. It’s not just the right thing to help employees manage their finances, it is critical for business success too.”