People across the country are continuing to grapple with economic uncertainty, the cost-of-living crisis, and mental health conditions, likely exacerbated by the pandemic, which are continuing to rise.
The impact of cost of living
Employees are facing increasing high costs, piling financial pressures and as a result, increased stress, and lower wellbeing. The economic climate has already triggered hundreds of job cuts across certain industries, which will only heighten anxiety for employees.
Energy, public transport, petrol and food is the highest it’s ever been in 13 years, and while the obvious solution to ease financial worries would be to offer pay settlements in line with rising inflation rates, for many employers this is not possible and fails to address the root of mental health concerns for employees.
What causes stress?
Any uncertainty in an area of importance is very stressful. The human mind experiences stress whenever there is change (even if change that is positive). It does not mean that all change is bad, but uncertainty from a change that feels fully out of our own control is particularly stressful and more likely to have a more significant negative impact on our mental health and wellbeing. Economic uncertainty can fit into the category of something that feels outside of our personal control.
Lifeworks’ Mental Health Index revealed that a negative but certain outcome, such as job loss, is stressful but is actually less stressful than the uncertainty from a fear of job loss or reduced hours or wages.
Who is impacted by stress?
Those who are more vulnerable to begin with are more impacted. If one has a cushion of savings and financial knowledge and options, there is a sense of control even in times of economic uncertainty. This sense of control and the feeling that although you may be impacted in the short term, you can manage generally in the long-term, is a big factor in mitigating stress.
Research from Lifeworks’ Mental Health Index also found that a lack of emergency savings is a driver of lower mental health, regardless of income. We found individuals without personal savings are 50% more likely than those with emergency savings to have difficulties sleeping because of stress.
The lack of financial cushion creates anxiety and higher vulnerability, which is stressful. Lower financial wellbeing also correlates with lower work productivity and higher turnover risk.
What can employers do?
With the clear work impact employers are looking for ways to help. It is important to remember that a salary increase alone does not mitigate the problems workers are facing as such contribute to more inflation and may not even be sufficient to make a meaningful difference.
The work environment, support, and sense of belonging and non-monetary recognition have a greater influence. Even for those who lack savings, money alone does not always result in savings and security. Programs that make it easier to save for emergencies, financial management information and coaching, company sponsored discount programs and even hardship funds should be considered to increase the long-term values of any pay raise.
A part of one’s experience in the work environment is flexibility. When Britons were surveyed in the Mental Health Index, almost a third (31%) said that flexibility in the hours they work was the most important factor to their wellbeing, over carer progression, with 28% saying it was flexibility in the location of work.
Clearly this shows employees need to consider factors other than just salary increases, which may not even be an option for most small and medium-sized businesses that are also seeing the effects of rising costs. While it is still important to pay at a certain level, businesses need to offer more to keep staff motivated while also adding value to the overall reward package. Offering perks within the company, such as discounted food and travel, can help and also shows concern and support for employees.
Workplaces that can offer flexible working options also allow employees to cut back on commuting costs, as well as balance factors including after-school childcare responsibilities, can in turn enable a focus on individual wellbeing and mental health. Lifestyle benefits like gym memberships and health insurance can also help protect employee mental health.
Additionally, the stress of economic uncertainty or any disruption, means that mental health support and services are needed by more people. It is important to ensure that such services are easy to access and well communicated. For workplaces it also means training managers on mental health in the workplace and their role in supporting it and providing the education that addresses the stigma around it. Managers should not be mental health counsellors for their employees, but they do have a role in a psychologically safe workplace and in stepping in when their employees need support.
‘It is never too late’
While all of this is most helpful when in place prior to a downturn, it is never too late. Implementing support during a downturn, or even ramping up communication of programs such as EAP and savings schemes that address these issues, is extremely helpful on a practical level and also shows that the employer is concerned about the wellbeing of their people.
Paula Allen is the Global Leader and Senior Vice-President of Research and Total Wellbeing at LifeWorks. Paula manages the research agenda for LifeWorks, which includes primary research, exploratory data science, research collaborations and meta-analyses. Paula has expert knowledge and expertise in current issues and the future direction of health, wellbeing, productivity and related risk management.