Examining Financial Distress: Consequences for Retail Workers

Data pulled from our latest Financial Wellbeing in Retail report unveils some stark realities. Almost half of the UK population end up distracted at work due to money worries, drawing attention to the pervasive problem of financial stress. Shockingly, 70% of the total population falls under the 'chronically broke' umbrella, pointing to the widespread financial strain experienced by many.

Delving deeper, about 50% of UK households lack the savings to handle a sudden bill of £300. This lack of financial resilience can have challenging consequences, potentially leading to debt and financial distress. In the retail environment, the shift-based nature of the work exacerbates this issue. Shift work adds complexity to budgeting and future expense planning, intensifying financial stress levels.

These statistics reflect not only on personal lives but also on productivity levels at work. Our research indicates that financially distressed employees are 20% less focused and productive. This decrease in efficiency negatively impacts organisational effectiveness, translating to hefty costs for UK businesses. Financial stress-related absenteeism and presenteeism alone cost businesses an astounding £1.56 billion annually.

Further complicating matters, retailers host diverse workforces, who span multiple life stages, each presenting unique challenges in addressing financial stress. Thus, a holistic and tailored approach to tackling financial distress can result in missed opportunities to enhance the wellbeing of retail workers.

Organisations can mitigate these issues by implementing strategies to alleviate financial distress. Here are some key actions:

• Ensure transparency on earnings to aid effective budgeting.
• Encourage employees to save and build financial resilience through 'savings nudges'.
• Allow access to earned pay at any time during the month by offering a non-locked pay cycle.
• Offer personalised financial support and coaching tailored to different life stages and individual needs.

By weaving financial wellbeing initiatives into broader wellbeing strategies, retailers can make a significant impact in their employees' lives and the organisation's productivity. It's incumbent on all retail sector employers to prioritise financial wellbeing - the key to healthier, happier workplaces for the future.

Wagestream provides employees with month-long visibility over pay, spending, and upcoming shifts. This clear picture of their income can empower better decision-making at a time when managing expenses is particularly critical.

Read the full report here.