Is monthly pay the reason why employees are feeling blue this Monday?
You might have heard some of the chat about Blue Monday – hailed to be the most depressing day of the year. It typically falls on the third Monday in January, where Christmas debt, SAD (seasonal affective disorder) and January blues all result in a perfect storm that has the potential to make even the most positive among us feel a little blue.
With so much talk about the day of depression we conducted some research to look at how much financial issues, post Christmas, contribute to the overall feeling and therefore what employers can do to make sure next year is a lot less blue. After all, employers are in the best place to be able to help their employees when it comes to money worries.
Our survey questioned a nationally representative sample of 2,000 GB adults (aged 18+). We found that as many as 1 in 6, equivalent to 8 million, Brits expect to be ‘in the red’ by Blue Monday; whether that’s from taking out a loan, using a credit card or dipping into their overdraft.
Over a quarter (27%) of those surveyed cited ‘money worries’ as their biggest contributor to the January blues each year, beaten only by the darker mornings and evenings (36%).
A whopping three quarters (76%) of those blame early paydays in December for their lack of funds at the end of the month. According to the survey, as many as 78% of Brits still receive a paycheck just once a month, with as few as 3% of people having the option to access their salary whenever they choose. What’s more, of those that expect to be ‘in the red’ by Blue Monday, 71% are paid on a monthly basis, compared to only 22% who are paid weekly.
With an infrequent cashflow impacting Brits’ ability to manage their money, over a third (38%) of the UK admit to needing to borrow money before the end of the month, with 12% of people spending more than half their day worrying about their financial situation.
What the findings tell us
It’s clear from the survey that financial issues are amongst the most troubling for Brits when it comes to Blue Monday. What’s also clear is that the majority of financial issues faced by Brits, such as the need to borrow money at the end of the month through payday lenders, credit cards and overdrafts, have come about due to an outdated system of monthly pay cycles and rigidity when it comes to pay. The early payday in December has only added to this issue, but obviously this isn’t something that’s unique to January, with almost 3.1 million people turning to payday lenders every year.
So here’s the good news
We don’t want to just harp on about the worrying state of affairs this January without providing practical solutions to ensure it’s not the same next year. Free coffee, office yoga and fruit baskets are all great initiatives, but with money issues creating the most stress, employers can look to have the most impact through providing practical financial tools that have employee wellbeing at the very heart of what they do.
We’ve highlighted some practical steps employers can take to have a real impact on employee financial wellbeing and their business as a whole.
What can you do
Talk about it
In the UK, we’re pretty shy when it comes to sharing our issues with others, especially when it comes to our finances. However, to learn that you’re not alone when dealing with something is often a great way to help people overcome it and strengthen relationships with others. Here at Wagestream, we organise tea and talk sessions where we put away our phones and just talk to each other. We may not get to straight to the issues at hand but it helps to know that colleagues and senior staff are there if you do need them.
Give your employees flexibility with their pay
It’s clear that the monthly pay cycle can have huge knock on effects for employees finances and wellbeing in general. Simply by providing them with visibility and access to percentage of the wages that they’ve already earned, you can help to stop them from turning to negative and embarassing forms of debt and make pay a far more positive aspect of working life. It’s the reason why 76% of our users feel less stressed when it comes to their finances and that 82% feel more positive about their employer as a result of using Wagestream.
Build a program that’s inclusive of all
We know that the trickiest part of the month is the period right before payday, where funds are low and payday lenders target their advertising more aggressively. That’s why a financial wellbeing programme that truly has employee wellbeing as it’s goal should be available to 100% of staff, 100% of the time to ensure that people aren’t excluded from support when they most need it.
Why it pays to care for employee financial wellbeing
By supporting staff financial wellbeing you’re not only improving the lives of your employees, you’re also giving yourself a business advantage. Organisations working with Wagestream are already seeing a 16% reduction in attrition, saving them thousands in recruitment and training fees. What’s more, with a stronger link between work a reward, clients have seen a 22% increase in hours worked. It shows that financial wellbeing isn’t just good for your employees, it’s good for business.
To find out more about how to start building a financial wellness strategy that puts employees first and delivers, get in touch.