The importance of supporting workplace mental health has surged in recent years, accelerated by the pandemic and our growing awareness of its impact on productivity and wellbeing. With one in six employees experiencing mental health challenges in the workplace, initiatives like Mental Health First Aiders have become vital.
But they’re only tackling half the problem.
According to the mental health charity Mind, at least one symptom of poor mental health affecting someone’s ability to function at work – such as sleep loss, poor concentration, and reduced motivation – is present in two-thirds of employees who are struggling financially¹.
Further research by Vitality² found employees experiencing financial difficulties lose, on average, almost 50 productive days a year – that’s 20% of their working hours. And considering more than half of employees admitted a decline in mental health due to financial concerns³, addressing mental health alone isn’t enough.
If employers want a balanced, efficient, and fully engaged workforce, they must support their employees’ financial wellbeing too – or face a mental health and productivity crisis.
Understanding Financial Wellbeing and Its Role in Mental Health
Financial pressure is on the rise: it’s now the top external stressor for employees, affecting 41% of the workforce⁴.
Whether it’s struggling with debt, unexpected expenses, or an inability to save, poor financial wellbeing can affect confidence, concentration, and happiness – all of which play fundamental roles in mental health.
This clear link was even proven last year⁵, when 80% of workers facing financial stress reported feeling anxious or depressed at least once a week.
Considering the debilitating ramifications of poor mental health, particularly in the workplace, businesses could be looking at a new kind of emergency within just a few years – regardless of which industry they’re in.
Some of the mental health consequences of financial instability include:
Chronic stress and anxiety – leading to increased absences, reduced confidence, and decreased work performance.
Increased risk of depression – affecting motivation, engagement, morale, and potentially resulting in long-term sick leave.
Difficulty sleeping – reducing the ability to concentrate, focus, and make optimal decisions.
Lower self-esteem and confidence – compromising satisfaction and worth in a role, increasing self-doubt, and reducing initiative.
And let’s not forget: even a small decline in mental health can lead to burnout and increased sick days – further reducing your company’s productivity and adding pressure to an already struggling workforce.
The Workplace Impact of Financial Stress on Mental Health
Did you know someone with a mental health problem will earn an average of £8,400 less per year than someone without one? And yet struggling financially is proven to be a risk factor for developing mental health problems – putting financial stress and mental health in a self-perpetuating loop.
In fact, it can be hard to tell the difference between an employee struggling with mental health and one dealing with financial stress, since the effects of both can manifest in almost identical ways.
Low mood, difficulty concentrating, reduced productivity, increased absenteeism, and lower confidence are all common consequences of both financial stress and mental health. One feeds the other until they’re inextricably linked.
Unfortunately, these ramifications usually spread throughout the workplace, potentially impacting your entire workforce: financial stress that leads to mental health difficulties can also be devastating to team dynamics and morale. Employees struggling with their financial wellbeing often experience lowered self-esteem and confidence, making them less likely to engage or speak up, and far more likely to withdraw from their colleagues.
In some situations, tension or resentment may arise if staff perceive financial inequalities within their team, such as salary disparities or the potential for extra opportunities.
While every manager wants to support their team’s wellbeing for the sake of their colleagues’ happiness, it’s also essential for the overall health and success of their entire workforce – and to keep their company performing optimally.
How Financial Wellbeing Initiatives Improve Mental Health
Since financial stress can be a driving factor behind poor mental health, alleviating that pressure can significantly improve overall wellbeing.
One of the most effective ways to address these challenges – without raising salaries or offering risky financial advice – is by supporting your employees through financial wellbeing programs.
In previous blog posts, we’ve discussed how financial wellbeing initiatives can improve workforces across the board, from increased productivity and focus in a role to higher job satisfaction, retention rates, and team morale.
Unsurprisingly, these results are similar to those experienced by employees reporting improved mental health.
This is because financial wellbeing programs can:
Lower stress levels – employees feel more secure about their financial future, reducing anxiety and mental load.
Improve focus, efficiency, and decision-making – less time worrying about financial fears frees up more cognitive energy and capabilities.
Higher self-esteem – overcoming financial difficulties or implementing proactive measures empowers employees to feel more confident and competent – personally and professionally.
Improve workplace dynamics – happier employees are more engaged, collaborative, and encouraging to be around; fewer money concerns also reduce the potential for workplace comparison and conflict.
Raise job satisfaction and worth – employees appreciate companies that prioritise their welfare through wellbeing benefits, making them feel more valued and inclined to stay.
Mental Health First Aiders vs Financial First Aiders
A straightforward way to introduce employee wellbeing benefits is by investing in one-off staff training, empowering your workforce to support each other as alternative first aiders. Businesses aiming to enhance employee mental health will likely benefit from training in two key areas: mental health first aid or financial first aid.
While offering both would be ideal, the best starting point depends on your employees’ most pressing needs and circumstances.
If something traumatic has recently occurred, involving or affecting a large proportion of your workforce, it’s likely mental health first aiders will be better equipped to deal with the various emotional consequences that could be affecting your employees.
If you’re looking for a more generalised approach – particularly if you want to help your workforce navigate ongoing societal challenges, such as the cost of living crisis – training financial first aiders can help you develop a more resilient team. Plus, strengthening financial wellbeing often leads to improved mental health as a byproduct.
Next Steps
Improving your employees’ financial wellbeing is one of the easiest and most effective ways to address both financial worries and mental health in the workplace.
Investing in one-off, low-cost training initiatives – like Money First Aid – can help reduce stress, boost mental health, and enhance focus, productivity, and retention – benefiting both staff and the business.
Find out how Money First Aid can support your company – book a free call or get in touch today.
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