Research from one of the largest surveys of its kind shows that financial worries cost UK employers £15.2 billion every year in employee absence, turnover and lower productivity. For a business of 1000 employees, this equates to a cost of £450k annually. Neyber’s fourth annual DNA of Financial Wellbeing report looked into the spending habits and attitudes of over 11,000 employees and 720 employers, surveying over 42000 people since 2016. This year’s research also shows that 20.3m British workers – 3 out of 5 people – of all income groups are affected by money worries.
Neyber’s research suggests that financial worries lead to a:
- £14.2 billion1cost in turnover, with 3.6 million employees looking for a new job
- £516 million2cost in lost productivity, as nearly 3 million people struggle to focus at work
- £478 million3 absence cost, from 1.63 million employees taking time off work.
The report also shows the impact on employers when employees have money worries: 11% of employees are currently looking for a new job, one in ten struggle to focus at work and those concerned about finances have each taken an average of 2.5 days off a year.
Encouragingly, 73% of employers now have a financial wellbeing strategy for staff, but just 40% feel theirs is well-developed (up from 64% and 30% respectively in 2018). Indeed, just 4% of employers include employee financial wellbeing as a top HR priority.
London City Airport
In London City Airport’s (LCY) case, its insights found that 22% of the international airport’s workforce were living pay cheque to pay cheque, while 21% lacked confidence when it came to managing money. Worryingly, LCY started to believe that these negative mindsets could be contributing to employee accidents at work. And with 70% of their workforce in operational roles, this couldn’t be ignored. LCY’s aim was to embed financial wellbeing into people’s lives.
Neyber was brought on board to increase financial education and reduce stress with the help of its product offering.The product range ‘went viral’ and colleagues were sharing the positive impact the new benefit had on their lives. Accidents at work dropped by 56% in two years and 92% of staff responded positively to the question, ‘how confident are you managing financial affairs?’.
Financial worries are top employee concern
The report shows too, from the employee perspective, that financial worries remain their top concern, with three in five individuals feeling the strain. What’s more, they’re worrying about their later life and retirement too – this is their second biggest concern. Those impacted are not just lower-paid; people with the highest salaries are worrying too.
Monica Kalia, Chief Strategy Officer and Co-Founder of Neyber,said:
“Addressing poor employee financial wellbeing can help employers achieve their key priorities. In London City Airport’s situation, the importance of safety was overwhelming, yet for other businesses it will be about growth.
“The good news is that the financial wellbeing space has matured with many employers making in-roads. Employers are moving on from the original question of “should we implement a financial strategy?” to “how do we best do this? Providing support that is relevant to the differing needs of employees is important. Financial wellbeing is not just about paying off debt, but about ensuring employees feel in control and confident about their future as well.”
1 Assuming actual turnover of 12.9% at average replacement cost of £30,614.
2 Assuming only 1 hour per month of lost productivity (1.5 days/year) at the average daily wage of £117
3 An average 2.5 days off at the average daily wage of £117.