How Managers Can Help Employees With Debt Problems

Debt affects a lot of people from all different backgrounds across the UK. As an employer, do you have a duty to help? And if so, how?

How Managers Can Help Employees With Debt Problems

According to the Money Charity, in February 2016, the average total debt per UK household was £53,083.That’s an average debt of £29,126 per person. The average consumer credit card debt was £6,332, and the number of debt problems dealt with by Citizens Advice every working day remains at around 6,407.

This highlights just how debt can impact our everyday lives, including our stress levels, relationships with people and ability to work. Debt stress has been shown to affect the mental health of a person.

So, as an employer, you could be worried about your employees managing their debt stress – especially if this impacts their working life.

Keep it open

The first thing you should consider is the openness of the working relationship between you and your employees. Make sure that your office door is, hypothetically, always ‘open.’

Do you answer your emails in good time? Do employees know that they can discuss issues with you if they need to? Do you adopt a positive attitude when talking to staff so that you appear approachable?

Fostering a positive working communication channel is key to supporting your employees. Of course, they might not want to talk to you about their debt or the impact this is having on their work, but it is important you make your presence known to them regardless.

It could also be in your interests to find out about their financial situation. For example, if your employee has an IVA or a Scottish trust deed, this could affect their working role in your company (if they handle money for instance) so finding out sooner rather than later is a priority. Don’t make your employees scared to come to you.

Credit checks

Employers are making greater use of credit checks, especially at the start of a recruitment process. You might choose to conduct a credit check on a staff member if you have concerns about them.

Credit checks on staff may be conducted to identify any risks to the employer. If it highlights any financial vulnerability, the person may not be suitable for that role. Equally, if the person in question is working in the police force, or the fire brigade, it may be a risk for them to be in this position of responsibility if they have a lot of debt to their name. However, there are of course many professions where having an IVA or trust deed to your name wouldn’t necessarily pose a risk of any kind to the person in that role or the company, so each staff member should be assessed on a case by case basis.

Additionally, many people will not want their employer to know that they have any financial negativities on their record. It can prove embarrassing to that person, especially if other colleagues find out. Employers who carry out credit checks should bear this in mind, and consider talking to the employee directly to discuss the issue further. Confidentiality at all times is also of utmost importance.

Wellbeing programmes

An employee wellbeing programme can be a great benefit to those employees struggling with their finances. Many programmes offer debt counselling or advice services. Make sure your HR department regularly distributes information on these programmes to all employees. The information should include how to get in touch confidentially.

Proper pay structures

One of the most meaningful things an employer can do if they really care about the financial wellbeing of their employees is become an accredited Living Wage employer. Research has shown that employers who pay the voluntary living wage to their staff find positive impacts on recruitment of employees and retention.

Whatever your company or industry – anyone can be affected by debt. Whether this impacts on their working life or not, it is in your interests to offer support to your employees and adopt a positive and open communication channel to them. Remember, a happy workforce is a more productive one.

Clare Greechan works for Trust Deed Scotland

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