If that sounds like you, then you will already know that worrying about your finances can sap your energy and distract you from the work in hand. And if it impacts you, then it will impact your colleagues too.
Understanding how people react to financial concerns is vitally important, and yet of course we need to protect people’s privacy. Your employee may not want to reveal they have over-stretched their credit card, or that their rent has increased beyond the point of affordability. Admitting to financial worries, real or imagined, brings with it a great sense of shame for many of us. The more senior we are, the harder it can be to admit that the sums no longer add up, that we are struggling. Yet very young people too face enormous challenges over money when all around them they may see people living a lifestyle that they can’t afford while feeling pressured to join in. Indeed, in some sales environments it’s still common practice to encourage sales people to spend their money as a way of keeping them ‘hungry to earn more’.
Low levels of stress keep us alert and engaged in the world, making us get up from the sofa and do something. High levels of stress reduce our capacity to think clearly, make good decisions and plan ahead.
It is clear that the next year or two are going to be financially challenging for many people, regardless of their level of income. Of course ,the lowest paid are going to have the fewest choices, but even those in higher pay may find the cost of rent, mortgages, and loan repayments making life difficult. Recent estimates from the Fuel Poverty Action group indicate that 40% of households are likely to be in Fuel Poverty next winter if fuel costs increase as expected. This means some of your people are going to be in a difficult situation.
Perhaps the simplest start is to make clear that you recognise some people will be in difficulties and there is no shame in admitting it. Sharing news stories that talk about the scale of the financial challenges ahead and completing the communication with a simple statement such as ‘we know that some of you will be impacted already, and more will face struggles over the next year or two’.
Next provide some sign-posting to support options. Is there a citizens advice centre locally that can give personal guidance?
Then provide some basic personal financial planning tools, so that people can look at how changing costs will impact their daily budgets. While the very lowest paid may already be accustomed to managing every penny, increasing costs are now starting to hit people who have never struggled before. Helping those people manage their budgets is a vital step to reducing long term financial woes. If you have a very young workforce, many may not be accustomed to managing money, and basic financial planning will be a valuable skill you can offer that will support them for the rest of their lives.
Managers may be able to offer some simple steps to reduce individuals’ costs. Perhaps changing hours of work can reduce commuting or childcare costs. If you don’t offer a low-cost staff café, is this a moment to think about providing one? Here’s a radical thought, you could start a company discussion about financial challenges and what you can do to help. Of course some people will say a pay rise is what is needed, be ready with your answer to that before you begin.
Ultimately, though you cannot solve your employee’s financial challenges, you can help them manage the stress. Perhaps you can arrange for a debt counsellor to give a talk, and then offer a confidential helpline to discuss individual problems. The sooner financial worries are discussed, the less likely they are to spill over into major stress related illnesses that reduce performance and often require extended time off sick to recover.
The next few years are not going to be easy for many people. Even if you are personally doing well, it will serve your business well if you recognise that others may need support, may be embarrassed to ask for it, and yet not dealing with the resultant stresses will make things worse.
Hedda Bird, CEO of 3C Performance Management Specialists and author of new book The Performance Management Playbook: 15 must-have conversations to motivate and manage your people.