The debt stigma – how trainers can help

Couple worried about money
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Heidi Allan
Head of Insights and Engagement
Neyber
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There is a stigma in UK workplaces that employers are rarely tackling, but must. 

It focuses on the vast levels of debt that millions of UK employees are carrying and which is shown, through mounting evidence, to have a debilitating impact on an employee’s wellbeing, their work and, as a consequence, a businesses’ overall productivity.

Open communication and education are the first steps

In my mind, debt - and the stigma that surrounds it - must come front and centre in workplace education, helping it to be discussed more openly so that individuals understand the support they can get and that they aren’t alone. It’s similar to the great strides that have been taken in UK workplaces about mental health.

Open conversation is helping individuals, as well as enlightening others, so it doesn’t need to be a well-hidden, painful secret.

Debt impacts millions of individuals, across pay-level, gender, age and regions. When you consider the number of individuals who are worried in some way about their finances, the impact on a company’s productivity is eye-watering.

In a recent independent survey conducted by Neyber, entitled The DNA of Financial Wellbeing 2017, 54% of employers feel that the effect of poor financial wellbeing has a negative impact on employee behaviour at work.

56% feel it impacts job performance, 54% feel it impacts relationships at work and 51% feel it impacts relationships with management. 

Revealing responses of 10,000 employees 

The DNA of Financial Wellbeing combines responses from over 10,000 employees and 500 employers and makes for more revealing, if stark, reading. For instance: 

  • 48% of UK employees are borrowing money to meet basic financial needs, this increases to two thirds for the under 34’s. Largely, however, they are staying clear of payday lenders – just 5% admit to using one in the last year.
  • 33% of employees say that financial worries are their biggest concern.  30% say they suffer from financial stress and 24% have lost sleep from worrying.
  • One quarter of employees have an income fluctuation of more than 10% each month; increasing to 45% in the young (45% of employees in the 18-24 year olds and 35% for 25-34 year olds) 
  • One quarter of employers think that their employees would be considered financially excluded, ie unable to access financial goods and services with convenience and at a cost that is reasonable.

How can training help?

The good news is that 82% of employers believe that employee financial health is important to the organisation.

And 17% say they will be focusing on the financial wellbeing of their workforce. This means they could be offering affordable finance and savings tools, as well as offering sound financial guidance, perhaps through an online hub.

Face to face training is also valuable. For it to work effectively, it needs to be available to all and should be titled as positively as possible to encourage attendance. Even the word ‘training’ can be perceived as slightly negative as it implies someone isn’t able to do something or isn’t doing it well.

‘Knowledge building’ or similar resonates better and is seen as more positive. 

Workshops can be given internally, but they must come across as helpful and not pushing any product or agenda.

Third-party delivery can often achieve better results as it is independent and the delivery teams don’t know the employees personally, which means delegates can be prompted to open up more.

What should be covered?

All the basics, such as day-to-day money management, demystifying common misconceptions, how credit scores work and the common traps people fall into without even knowing. 

Another challenge facing employees and employers is ensuring the people who need financial products, services and support can access them without needing to use overly priced or unsuitable options.

Giving employees a head start, by building knowledge and showing good and bad examples of these issues can help them.

Looking beyond the basics is important too. If individuals understand how to start changing their mindset and break bad habits, then it can help them put the basics into action. These often get the best responses and interactions.

High financial exposure can be reduced

Right now, a large proportion of the UK’s population is financially exposed without longer-term financial resilience. Static earnings, increases in essential spending like utilities and a changing economic environment leave many poorly prepared for the future. 

Financial wellbeing, to me, doesn’t come from an individual spending more or less.  It comes from having control over what they spend, and that’s what training and employers can deliver.

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11th Jul 2017 13:11

What a great idea!

is there a "train the trainer" course available?
(I'd love to run sessions in my organisation)

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By Tony95
22nd Jul 2017 16:47

Thanks for this helpful advice, Heidi! Definitely, the debt carried by employees across the UK (and any other counties also) not only affects financial life, but other spheres of life also. Into my opinion, the thing is that today lending tools and services are more than available, getting in debt has never been easier than today! For example, many of us prefer putting expenses on a credit card than paying with cash, use services like Find Lender to find loan providers ready to lend some money till payday. I think that working people have to be more focused on saving money and making up their own financial wellbeing where they live within their means.

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