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The cost of living crisis at work: How organizations can protect employee mental health

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Content

  • Part 1 – How did the cost of living crisis happen?
  • How bad is it going to get?
  • What are the links between mental health and money worries?
  • Part 2: The COLC in the workplace
  • What impact can financial stress have on employees?
  • Why is conversation so important?
  • Why do managers and leaders need this knowledge?
  • What should you look out for?
  • Part three: What HR can do
  • Here’s how to start:
  • For further guidance

Nine in 10 Brits say their living costs are rising. Financial stress can gnaw into our lives – wrecking our wellbeing. Managers and leaders can’t control the energy cap, but they can support staff mental health to manage the psychological and economic fallout. Here’s how.

Financially, these are tough times. For many, the toughest times they have ever experienced. The combination of high inflation and soaring energy and food bills has created a cost of living crisis.

But some still see financial worries and mental health as off-limits for workplace conversations, leaving staff to suffer in silence. Some 55% of us aren’t comfortable opening up about our finances, even though half (48%) have worried about money recently.

Businesses stand to lose huge sums from employees unable to work at their best. This makes action important – both morally and financially.

Keen to support your staff and emerge as champions during the cost of living crisis? You’re in the right place; read on.

Part 1 – How did the cost of living crisis happen?

Short answer: it’s complex. Rising costs can be linked to a whole bunch of Covid-spiked and global economic factors. The result is far easier to explain: everything’s getting more expensive.

Inflation is at its highest level in 30 years, energy bills are soaring, fuel and food bills are rocketing. Many people whose finances were pushed to the limit by the pandemic are now at breaking point.

How bad is it going to get?

The truth is that nobody knows, but things aren’t going to improve any time soon.

Energy bills could get even worse as the cap the maximum amount a utility company can charge a customer in the UK – is expected to rise again in October.

British Gas’ owner Centrica expects 18 months of high gas prices, and experts warn of pain at the petrol pumps for “the foreseeable future.”

What are the links between mental health and money worries?

We all worry about money. And the worse our financial situation becomes, the more of a toll it takes on our mental health.

A recent study from the Royal College of Psychiatrists found that half of all adults with a debt problem are also living with mental ill-health.

“As humans, we all need money to feel safe and secure, to survive. When we don’t feel safe, there’s a natural stress response that can happen and that means financial issues can bring up overwhelming feelings.”

Dr. Sophia Gerbase – Clinical Psychologist at Unmind

Part 2: The COLC in the workplace

What impact can financial stress have on employees?

Sounds obvious, but the whole of a person comes to work. This means that the employee with money worries will worry about money at work, and it can massively impact their productivity.

In fact, Money and Mental Health Policy Institute data shows that two-thirds of employees who are struggling financially show at least one sign of poor mental health that could impact their work performance.

Why is conversation so important?

For some employees, this really could be a matter of life or death.

Over half (58%) of people with debts of more than £30,000 have had suicidal thoughts in the past year.

Then there’s the financial hit. The Centre for Mental Health found that British employers lose £1,035 a year – per employee – because of lost productivity from stress, anxiety, and depression. That’s a grand, sad total of £26 billion.

And yet, in a study by financial wellbeing provider Neyber, only 4% of employers rated employee financial wellbeing as a top HR priority.

That stat is worthy of reflection. Imagine it was a physical illness that ripped through the workplace and sparked such rocketing sums. Would it be taken more seriously? You’d certainly hope so.

Why do managers and leaders need this knowledge?

No one expects managers to become experts. It’s not an employer’s job to provide solutions, after all.

But managers are on the Monday to Friday frontline – a form of mental health triage. And if a manager is trained to know what to think about when talking to staff, how to create a culture of communication, and how to signpost to external support, the difference they can make is huge. And hugely valuable.

What should you look out for?

There’s no one-size-fits-all solution. The signs will be a bit different for everyone.

Maybe an employee will struggle to concentrate. Maybe they’ll be more easily overwhelmed by daily demands. They may be irritable and get frustrated. Or retreat into themselves. Quite possibly, they won’t do any of the above.

That’s why a human approach is key (think active listening, not a tick-sheet). Long term, a company-wide culture that champions mental health – where it’s okay to seek help, flaunt your flaws, and be vulnerable – is where real (and lasting) change happens.

Part three: What HR can do

Every crisis needs a hero. And, if the pandemic showed us anything, it’s that these can crop up in the most unexpected of places. Right now, proactive and forward-thinking HR leaders can be the cost-of-living heroes we all need.

While there are no easy answers, providing an action plan for creating a healthy environment (mentally and financially) is an A+ place to start.

Don’t see this as a problem to fix. See it as an opportunity for growth. Or, even better, a culture to curate.

Here’s how to start:

  1. Be human: This sounds simple, but as companies grow, humanity can at times get lost. A manager who is authentic and open in communication can be so important. And remember that every employee is a whole human being (with their own, unique share of issues, challenges, and experiences).
  2. Embrace the duty of care: It’s easy to be a good employer when things are going well. A great employer steps up when things are going badly. Do this, and your staff will remember.
  3. Educate managers: Basic mental health training can make a big difference, especially when it comes to putting theory into real-life situations. It’s handy for managers to know how hard it is to get things done when your mental health isn’t great.
  4. Clear and honest communication: Messaging that says “If you’re struggling, come and talk to us.” Break the stigma and show how struggling isn’t simply common, but human. Managers can ask their employees about money worries during one-on-ones, and the topic can be covered in company meetings. This message should run throughout the whole organization.
  5. Offer flexible working: For example, freeing up a staff member to ring their energy supplier and find a better tariff during working hours means you get 100% of that worker when it’s sorted out.
  6. Signpost to internal help: Make sure your people are aware of the tools, education, and resources that exist in your wellbeing program that promote mental and financial wellbeing. Keep pointing to these until everyone (every last member of staff) is 100% aware.
  7. Signpost to external help: Help is out there, but it’s not always easy to find it, especially when you’re in the middle of a crisis. Pointing an employee towards the Debt Advice Foundation, StepChange, Citizens Advice, Money Advice Trust, or even their GP, is sometimes the most useful thing you can do.

For further guidance

To find out more about how Unmind can help drive cultural change within your organization, book a chat with an Unminder today.