Personal Debt and the Workplace

It’s no secret that levels of personal debt have been on the rise in recent years- the Trades Union Congress (TUC) claimed earlier this year that levels were being pushed into a “danger zone”. This suggestion comes in the wake of household debt edging up to an average of £13,200 at the end of 2016.

Less widely known, though, are the ways in which this constant financial pressure can impact upon people’s lives; affecting everything from their personal habits to their sleep patterns. We generally like to think of our private and professional lives as two separate threads, but the more a person worries about debt, the more these anxieties become entangled with their experience at work.

Effects of Personal Debt at Work

The correlation between debt and mental health is striking. A survey by Creditfix, the UK’s largest insolvency firm specialising in IVA help and advice, found that half of respondents in debt admitted to experiencing depression. Depression rarely springs from a single source, but the anxiety and despondence that struggling with debt can cause does appear to be a significant contributing factor. Respondents in this survey also reported insomnia, anxiety, and even suicidal thoughts. Such symptoms cannot simply be left at home when a person travels to work, and can have a significant impact on their performance, workplace experience, and even, in some professions, their safety.

It is often impossible to simply “switch off” worries, so debt-related anxieties can frequently occupy an employee’s mind even in their workspace. This can lead to reduced focus, as valuable mental space is instead dedicated to worrying about interest or repayments instead of the task at hand. Constant anxiety can also have a number of other effects on professional life, sometimes causing irritability, which has the potential to impact negatively on teamwork. Anxiety can also pave the way for insomnia at home, so employees who are struggling financially are much more likely to arrive at work fatigued, leading to lower productivity, arriving late, or being absent altogether. It is estimated that 11.7 million working days are lost every year to stress and depression related absences. Since half of adults in debt report depression, it stands to reason that a significant number of these days can be attributed to debt-related mental health factors. Indeed, a 2017 study by the Society for Human Resource Management found that 24% of HR professionals noticed financial worries causing absenteeism and lateness. An unfocussed mind can be especially problematic for those employed in manual jobs, as reduced focus raises the risk of accidents.

Fatigue and anxiety might not be the only reason employees with problem debt struggle to focus. One of the most stressful aspects of this type of debt can be the plethora of hassling letters and phone calls received from creditors. Employees getting calls from their creditors during work hours are not only more likely to be on edge, but the calls themselves can add up to reduce the amount of time they are focussing on tasks.

The Sings to Look For

The changes which problem debt can wright in an employee may at times be easy to miss, but a number of behaviours are often indicative:

  • Taking on extra hours or another job: Working for longer stints, or seeking an additional source of income could be a sign than an employee is struggling to cope with their financial affairs, and are attempting to earn more as a solution. This can lead to the fatigue discussed earlier, hence reduced focus and performance. If employees seem to be taking on more work than they can handle, debt worries could be the reason.
  • Lateness or Absenteeism: Conversely, the impact of debt on an employee’s mental health may be severe enough to impede their attendance at work. Fatigue, anxiety, and depression can create a heady cocktail of despondency, in which employees struggle to find the energy required to commit to their position.
  • Resorting to Drugs, Alcohol, or other Crutches: Dependence on alcohol or other drugs could be a coping mechanism for other problems in an employee’s life- possibly debt. Taking up smoking is another unhealthy crutch which is sometimes used to deal with the stress debt can entail. Taking regular breaks to smoke, or coming to work hungover, can further impact an employee’s focus. Similarly if an employee has begun to gamble, whilst this could become an issue in its own right, it is likely related to existing financial pressures, as it provides the hope of a “quick fix” to debt problems. Finally, poor diet, or sudden weight loss could be a sign that an employee is dealing with high levels of anxiety, which could also be debt-related.

What can Employers do?

Whilst there is no single solution to help employees whose debt worries follow them to the workplace, there are plenty of options for supporting them through financial difficulties. First and foremost, education is key. Even a step as simple as providing free information about where to turn or what to do when struggling financially, in staff areas or even alongside payslips, can make a huge difference to an employee’s situation, leading to better mental health and productivity. If possible, inviting experts to run workshops on handling money and dealing with debt can be a real help- even employees who are not currently struggling will benefit from gaining a keener insight into what help and options are out there, preventing future issues.

Another option might be the introduction of financial counselling, as part of a company’s employee benefit package. This can certainly prove cost-effective in the long run, as less financial stress leads to fewer absences. A programme such as this also allows employers to demonstrate their desire to assist their staff through difficulties, leading to employees who feel more supported and comfortable. Introducing an Employee Assistance Programme (EAP), or adding financial counselling to an existing one, may also be a good option. Finally, if employees struggling with debt are to be supported in the workplace, it is vital that employers, or HR staff in larger enterprises, remain approachable, friendly, and non-judgemental. A one-off workshop may be the ideal way to ease what is often a highly stigmatised topic into the open, encouraging those struggling to make their employer aware of their situation, so better able to support them. When it comes to struggling with debt, communication is always vital- debt help is out there, and approaching employees who ae struggling financially with openness and understanding could help them feel more comfortable seeking it.

photo credit: danniatherton Image Library Danni Atherton Canberra ACT via photopin (license)

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