This report represents an update to prior research conducted by Cebr and Aegon regarding financial wellbeing and its implications for workplace productivity. Cebr’s original 2018 report aimed to comprehensively assess financial wellbeing among the UK employee population and gauge its impact on workplace productivity. The 2021 update extended this inquiry by investigating potential changes in financial wellbeing over the preceding three years and by delving into the more mindset-oriented facets of overall wellbeing experienced by employees within their workplaces. The following represent key findings from this research:
- Over the past two years, the proportion of both full-time and part-time employees missing work due to financial concerns has risen to 12%, up from 10% previously. On average, employees lost 4.7 workdays per year, similar to the 4.9 days reported in the previous study. Consequently, this has led to over 3.2 million private sector workers requiring time off in the past year, equating to 16 million workdays lost.
- Financial worries have also taken a toll on productivity, with 23% of full-time and part-time workers reporting a decline, compared to 18% in the previous study. This translates to approximately 6.2 million employees experiencing reduced productivity at some point over the last two years.
- Absenteeism due to financial worries is estimated to cost UK employers £3.7 billion annually, while presenteeism due to financial worries is projected to have an even higher annual cost of £6.6 billion. These figures represent increases from the previous study, where absenteeism and presenteeism cost £2.5 billion and £3.7 billion, respectively. As a result, the combined annual cost now stands at £10.3 billion, marking a two-thirds increase from the £6.2 billion reported two years ago. In 2021 prices, this stands at £9.5 billion, representing an alarming increase in costs, in line with the worsening economic outlook in the UK, marked by a cost-of-living crisis and financial strain on households.
- When examining businesses of varying sizes, the estimated average annual costs for absenteeism and presenteeism due to financial troubles are as follows: £7,404 for small firms, £37,014 for medium-sized businesses, and £526,478 for large corporations. All business sizes have witnessed significant cost increases compared to two years ago.
- Our study also reveals concerning trends in employee well-being. A substantial 55% of the working population in the UK reported feeling that their work lacked meaning, while 63% felt underpaid compared to their peers with similar experience levels. Additionally, 68% expressed uncertainty about their life’s direction. These figures represent increases from the previous study, where the respective shares were 55%, 59%, and 66%.
- The impact of these sentiments is significant, affecting approximately 14.9 million, 17.0 million, and 18.6 million full-time and part-time employees in the private sector in the categories of meaningful work, compensation satisfaction, and life direction uncertainty, respectively.
- For small businesses, the estimated annual costs associated with employee distraction due to feelings of meaningless work, an uncertain life path, and being underpaid amount to £9,408, £10,720, and £10,281, respectively. In medium-sized businesses, these costs rise to £47,036, £53,596, and £51,398 annually. Large corporations are projected to incur costs of £669,028, £762,327, and £731,063, respectively. It is noteworthy that the cost per business for each aspect of employee mindset has risen compared to levels observed two years ago.
Against the backdrop of heightened absenteeism and presenteeism stemming from financial worries, the associated costs have surged. The combined annual expense of absenteeism and presenteeism now stands at £10.3 billion, a significant increase from £6.2 billion two years ago. In 2021 prices, this stands at £9.5 billion. Financial wellbeing is gaining prominence for both employees and employers. Understanding employees’ financial needs comprehensively is essential, not only for businesses aiming to attract and retain top talent but also for fostering a conducive and meaningful workplace.
Consequently, the higher cost figures outlined in this report, coupled with the persistent or rising levels of absenteeism, presenteeism, and adverse mindset aspects among full-time and part-time employees, underscore the urgency for employers to prioritise addressing their workforce’s financial wellbeing. This is especially pertinent given recent economic challenges, which are likely exacerbating financial stress and emphasising the need for proactive employer efforts to enhance financial wellbeing in the workplace.