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How debt impacts the performance of your workforce


How debt impacts the performance of your workforce

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How debt can impact performance of your workforce

-Market overview

-Physical and psychological effects of debt

-How EAP’s and HR can cope

-Services available

There are thought to be around 30.5 million people aged between 16-64 in employment as of November 2017 . This means that from time to time, there will always be those in employment facing a difficult time in their own personal life.

For HR professionals and management teams in large business, the performance of staff is something that you will want to ensure is always high. There are a number of ways that you can motivate staff as well as keep their morale up, however what if the reason that they are under-productive is because of their own personal life?.

Everyone has points in their life which are difficult. It could be buying a house, getting married or perhaps going through something traumatic such as a divorce. One factor that we tend not to talk about but one which could have a huge impact is personal debt.

Living with financial worries could be a real point of concern for your workforce. Whether it is rising credit card bills, multiple loans or a big overdraft, when it gets out of control, debt can take over an individual’s life.

This article sets out to not only look at the personal debt issues that we are finding up and down the UK, but how the fall out of this could affect more than just your personal life, also affecting employment.

Personal Debt in the UK

Personal debt is something that most of us will have at some point in our lives. Figures from a recent report by The Money Charity showed that the average debt per household in the UK including mortgages was £55,982 . This could be broken down further as an average debt, again including mortgages of £29,930 per person.

If you take a look at how much actual credit card, loan or other financial agreements (excluding a mortgage) each household has this came in around the £7,118 mark and per person it was £3,806.

Whilst these seem like manageable figures for the most of us, it seems that debt is something that still causes issues for others around the UK. In fact, debt is still the second most advised issue that The Money Charity see request for help on.

Ways that debt can affect the day to day performance of your workforce

Creditfix, the UK’s largest insolvency proactive, compiles the UK  Personal Debt Index (PDI). The quarterly report is put together following a survey of over 31,000 individuals, comparing the situation and locations of people across the UK currently receiving support to get out of debt.

At the end of 2016, Creditfix found that 70% of people who had experienced debt in their lives felt that it had some impact on their mental health. This included depression, anxiety and even thoughts of suicide. These mental health concerns can also cause issues in their work life too. These issues can come in a variety of forms.

Interrupted working days due to phone calls

As with any creditors chasing money they are likely to be open the same time as you, they are likely to call your employee whilst they are at work. Not only can this be distracting for them, but it can actually take them away from their desk and the tasks that they have to do.

Even if this is only for a few minutes at a time, it is still a disruption that could leave them behind.

Taking on extra jobs or work outside of their main employment

If the employee has money concerns, then the chances are that they will want to make more money in order to pay off those bills. Some people may ask for extra overtime within your workplace, whereas others will take on work outside. This could be in the form of an extra job, or perhaps freelance work. No matter what form the extra work comes in, you could find that it has an impact on their work.

The simple reason for this is that they will be concentrating their efforts elsewhere. They may be exhausted from working so many hours, and this could stop them from giving 100% in their main job, working for you.

Lack of sleep

Worrying about money could leave an employee struggling to fall asleep in the evening. A lack of sleep can have a considerable impact on the performance of your employee. If they are feeling tired, then their brains are much more likely to wander. They won’t be able to focus on the tasks that they have to complete and when they do, the chances of mistakes may be higher.


Stress and lack of sleep could affect the performance of an employee, but may also stop them from coming to work at all. Absenteeism is much higher if the person is facing debt problems, possibly as the stress starts to affect their health.

Statistics published by the HSE Gov website claim that the total number of days lost during 2015/2016 due to stress or illness was 11.7 million days. Whilst the reason for these absences can be attributed to a number of different factors, stress caused by personal concerns about debt would definitely have contributed to this figure.

They may also be late in the morning or take longer breaks during the day. This could be because they are on the phone or perhaps because they have an appointment to attend.

Greater chances of smoking or alcohol and drug abuse

Whilst these are also lifestyle factors they cannot be overlooked. This may not be a consideration for everyone, but there are some people who may find that they need coping mechanisms to help themselves cope with their worries about debt. This could lead to a greater chance of substance abuse.

Drinking and smoking is are the most common affects that an employer may see in their staff. Smoking in particular is something that they are likely to do during the working day. They will be away from their desk at several points during the day, disrupting their work.

A more serious side effect is alcohol and substance abuse. Both of these can affect how an employee performs when they are at work, especially if the alcohol or drugs are still in their system.

Not only this, but all of these things have a knock-on impact on their attendance, leading to them not turning up for work.

A higher risk of accidents

We have focused mainly on those who work in office environments, however debt can put just as much pressure on someone who has a manual job. In fact, someone who works in a manufacturing line or perhaps a factory, is at risk of having a workplace accident.

These could be caused be tiredness, or lack of focus in the task in hand. No matter the reason, a workplace accident can be incredibly dangerous. Not only for the employee, but for those around them too.

A lack of teamwork and morale

If someone is struggling financially, then they may become withdrawn and interact less and less with their work colleagues. This can reduce their ability to work together as a team, their cohesiveness and perhaps even their morale.

Ways that you can help

Whilst you cannot wave a magic wand and wish all of your employee’s debt issues away, there are ways that you, as an employer can help. The main focus on any employers drive to support their staff is to be focused on proactivity not reactivity.

By being proactive you can tackle the issue head on, rather than waiting for it to become so bad that it has an impact on the employee, not to mention you as an employer.


One of the simplest and most proactive approaches that you can take is to educate and support your staff in financial aspects of their life. Perhaps organising workshops or presentations that can help them to understand more about the right way to approach debt issues. That way, your staff can be better prepared for any curveballs that life can throw at them, possibly resulting in a reduced need for them in them to take out additional credit.

Importance of Employee Assistance Programmes

Another great option is to have a debt counselling service as part of your current benefit programme. These types of services are usually available through a financial planner, and can give them the professional advice that they need to help get themselves out of debt. Employee Assistance Programmes have proven vital in minimising the risk of health and wellbeing issues developing in your workplace.

They can include a number of different factors. This includes aspects such as offering support for childcare in emergency situations, regular health screening drives in your workplace or helpful workshops and sessions for overall health and wellbeing.

By including dealing with personal debt in this EAP, you can try to minimise the amount of days that you lose as a business due to stress and illness-related absences from your workplace, as well as ensuring that your staff feel more supported in their personal lives.

Be approachable

However, both of these things depend on the employee attending or asking for this help- something that can be difficult for them to do.

Not only can you easily integrate these things into your current health and wellbeing programme, but you can also make sure that you are there to provide support on a more one to one basis. Whilst you may not be able to provide the advice that they need, simply being there and allowing them to discuss their problems could be enough to prompt them into taking steps to improve their own finances.

In the case of a larger business with many hundreds of employees, there may not be the opportunity to have an open door policy for any employees to come and discuss their issues. In these businesses, the face of employee support and assistance will most likely come in the form of an HR team.

Make sure that the HR staff within your business are seen as approachable and able to offer support to those employees in need. The attributes of a good HR person are that they are supportive, caring and approachable. Employees will also value confidentiality in their approach, e. Especially if the issue concerns personal debt.

Find the right HR staff at those early interview stages and then ensure that they follow up these skills with training and courses to help them to provide the support and advice that they need to for your staff.

Every business will want to be a success. The biggest factor in this has to be the performance of your employees. This means that you will want to do everything you can to make sure that they are not only working at 100% for you, but that they are incredibly happy in their personal lives too.

Personal debt may seem like an issue that they have to deal with outside of work, but when it is causing an impact on their working life, perhaps it is time for you, the employer to step in and offer the support and guidance that they need to give 100%.

Not only will you create a positive and productive working environment. But by showing your employees that you value them all as people you are likely to have staff that are loyal and dedicated to working for you.

A positive outcome for everyone!

If you feel as though you know of someone who could use help in dealing with debts get them to visit . Alternatively if you feel that your place of work could use some of the training mentioned, an in-house talk to discuss financial responsibility and options that may be available please email or call and 0141 565 1300 and  speak to someone.

If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.


[1] – ONS. (2017). UK labour market: Jan 2017. Available: Last accessed 23/01/2017.


[1] The Money charity. (2017). The Money Statistics January 2017. Available: Last accessed 23/1/2017.

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