A few years ago, it was people who were out of work who most often experienced financial problems; however, now it’s almost as likely that employed people are struggling too.
The average level of personal debt in the UK is around £30,000 and while some people manage to service this level of debt without problems or stress, many don’t and this worry can affect their performance at work.
You should help employees who have debt problems
Offering support to struggling employees doesn’t just help the worker, it also helps the company. There are a few reasons for this – employees who are in debt can be sleep-deprived, stressed, distracted and might also be fielding calls from creditors instead of finishing that report.
A surprising effect of debt on employees is that it can also lead to them showing up to work when they’re not well enough to because they worry about their job security. A day here and there can be covered by the other staff and longer illnesses – a week or so – can be covered by temporary staff if necessary. It actually, in the long-run, costs businesses 1.5 times as much in productivity if sick employees come into work than if they stay off. Not only do they pass on bugs to everyone, but they’re just not on form.
A simple solution to this is to signpost your employee to Creditfix so they can get help, advice and maybe even a consolidation or debt management plan (DMP). Consolidation often reduces the repayments and helps the person feel in control; with a DMP, creditors can’t pursue debtors as long as they maintain the agreement.
Workplace support forpersonal debt problems
The case for employers offering help with employees’ debt problems is quite clear – it benefits both parties and also improves staff morale and loyalty, improving staff retention.
Here’s how you and your company can help.
Employee assistance programmes
If your company has an EAP, make sure it features personal, legal and financial counselling services. Not all companies can afford to run an EAP, of course, so if you’re on the smaller side of small-to-medium, you may need to make use of charities instead.
Signposting to the relevant charities
Many industries and sectors have their own benevolent charities that offer help, advice and even money to people in financial distress. If your industry has such a charity, then make sure all your employees know about it. Send out links to the charity with payslips and round robin emails so everyone’s aware of them without anyone feeling targeted.
Financial education in your workplace
Many employers provide financial workshops for employees and you yourself, alongside other managers, could attend a workshop to learn how to offer support. Most workshops for employees look at making the most of existing income, financial planning and building up savings.
You know your employees best, so you can decide how to approach individuals you’re worried about, as well as how to deliver information and workshops. Some places will prefer to access information online and in confidence through an employee portal or they might be quite happy having a gather-round to swap tips and concerns.