Money on the mind: How the cost of living crisis is impacting organisational wellbeing

Do you know how many of your employees are currently experiencing sleepless nights? On the back of a global pandemic, they’re now faced with rising inflation, rising fuel prices, rising energy bills… and so the list goes on. To say that times are tough is probably the understatement of the year.?

Even before the current cost of living crisis really took hold, research from the Joseph Rowntree Foundation in early 2022 showed that one in eight workers already lived in poverty. This is an alarming statistic. And now an increasing number of hard-working employees are facing mounting financial difficulties. There are no signs of the situation improving any time soon either - with more energy bill increases on the way it’s only going to get harder. For a lot of employees, it’s starting to feel like desperate times.?

So how’s your organisation responding to this? Would you agree that you’ve got an empathetic culture that’s helping employees navigate their way through and supporting them with their financial worries, or could you be doing more??

Money worries don’t just stay at home

Those struggling with financial worries won’t just leave them at home. We're human after all; work is part of our lives and, consciously or not, worries affect us wherever we are. CIPD research released in April found that one in four employees believed money worries were affecting their ability to do their job. A more recent Reward Gateway survey found that 57% of UK employees (61% globally) think stress from the cost of living increases is negatively affecting their work.?

Without a doubt, this situation’s harming employee wellbeing, and therefore their performance and productivity. It’s going to be affecting concentration and mood, making employees feel tired and burnt out. It’s likely to be raising anxiety levels, potentially triggering depression and increasing absenteeism. You might be at risk of losing some great employees because of it too, if they decide to start looking for a higher paying role, or a company with a more supportive culture…??

Are you talking to your employees about their financial wellbeing?

So how aware are you of the extent to which this is becoming a problem for your own employees??

Wagestream’s State of Financial Wellbeing 2022 report suggests there’s a big disconnect between employer and employee perception. Employers estimate around 2% of their people worry about money every day, but ask employees and that figure’s 24%. And it’s worth noting the research was done at the end of 2021 into early 2022 – that number’s probably gone up since then, given the subsequent escalation of the crisis.?

Plenty of organisations are already taking action. In some cases that might include raising salaries, or giving one off cost of living payments as the likes of Virgin Money did recently. But realistically, this isn’t a solution that many businesses can offer – after all, they’re being hit by rising costs too. Some organisations already have financial wellbeing policies in place, and are signposting support that’s available externally along with schemes like employee assistance programmes and salary sacrifice options. They’re all great ways to offer help… but they aren’t the only ways you can support employees.??

Time to tackle the ‘money conversation’ stigma…

In the Wagestream research mentioned earlier, 68% of employees being affected physically or mentally by money worries said they didn’t feel able to share their concerns with their employer. Just think about that. Potentially that’s a huge proportion of employees struggling on while privately attempting to cope with their concerns.?

Let’s face it, there can be a real sense of unease talking about this kind of thing for many people – it can be incredibly awkward and not something a lot of employees will feel they can discuss at work. Which is something organisations should be addressing.??

Because we know that having open conversations is hugely important, not only for helping people to manage the practical considerations, but for dealing with the emotional implications too. This is one of the messages that events like November’s Talk Money Week promotes, helping to break down the taboos, and kick start conversations. But this should be something that’s happening all year round. So is anyone getting involved in regular financial wellbeing conversations in your organisation???

Be relatable and show empathy

It’s often HR who are leading the way, but they shouldn’t be the only ones taking the initiative. They should be enabling line managers to have conversations too. As well as knowing about any financial wellbeing policies in place and practical support that’s on offer so they can highlight it, managers need to be given the right skills to know how to initiate and handle these kinds of conversations effectively. They can be guided in how to build trust and rapport so they can have open conversations and create a safe environment for people to share their worries. Not only that, but they must also understand the power of listening deeply too, to ensure conversations are empathetic, focused and supportive.?

Of course, a line manager won’t be able to solve all of an employee’s money worries but what they can do is adopt a coaching mindset that helps them gently encourage someone to start opening up about their situation if they need to, and feel able to talk about any problems they have. And it means the manager can go beyond being a sympathetic ear, and instead use their coaching skills to explore possible solutions that could make the situation feel more manageable.?

These types of coaching conversations nurture a trusting environment, helping leaders and managers explore how they can support their team as flexibly as possible: enabling hybrid working to avoid expensive commutes for example, or giving employees space to manage working hours if they need to go to appointments relating to their financial circumstances.?

Empower employees to manage their wellbeing

Managers can also use a coaching style to help employees feel better equipped to cope with their situation, supporting them to consider their own wellbeing, think more clearly about what their options could be, and achieve a more resilient frame of mind.?

It won’t suddenly eliminate all their financial worries but it can alter the way they go about handling them; this mindset can enable them to better manage the pressure they’re feeling, and makes it less likely they’ll end up feeling utterly overwhelmed.?

Help employees know they’re not alone

It seems that this situation isn’t going to get easier any time soon so organisations need to proactively support their people in every way they can. Not everyone will feel able to ask for help - so one of the most important things you can do is make it possible for people throughout your organisation to feel that they can have these kinds of conversations and know that they’re not alone.?

Do employees in your organisation have money worries on their mind? Our coaching enablement solutions are designed to give managers the skills to hold sensitive conversations, as well as provide self-directed coaching support that helps employees manage their resilience and wellbeing.??

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