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How to notice if you employees are struggling with debt


How to notice if you employees are struggling with debt

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How To Notice If  Your Employees Are Struggling With debt 

  • What is the issue
  • Spotting the signs
  • Healthy vs Unhealthy debt
  • The impact of proactive management & HR
  • Attachment of earnings , wage arrestment and finances role in helping with debt
  • How you can help
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There are times in life when people need to make purchases that they can’t afford to pay outright. This could be a car, a holiday or perhaps something for their home. So what do the majority do in these circumstances? Some of them save, some simply don’t buy the item, and some turn to personal credit facilities in order to get the funds.
Whilst personal debt can work brilliantly when approached carefully, it can also be something that spirals out of control. It can have an impact on a person’s personal life, health, wellbeing and even employment.

The last thing that employers will want is for their staff to be suffering with personal debt. This article not only takes a look at personal debt in more detail, but it also provides detail on how employers can take charge in helping their employees to find a way to cope with their personal debt.

What is Personal Debt?

Personal debt is something that affects a wide number of people around the UK. It comes in a variety of forms; including overdrafts, credit cards and loans. The average adult in the UK owes around £29,930 in personal debt. Whilst this is the average figure across the UK, for some people the amount that is owed could be much higher than that.

How can Personal Debt affect people?

A manageable level of personal debt is going to have a minimal effect on the personal life of the person paying it back. However, if the debt starts to increase, it can start to have an impact on them in a number of ways.

Potential side effects:

Spotting the signs of an employee struggling with debt is one of the best ways to get them the help they need. Spotting these signs can be difficult from a HR perspective as there may not be as much staff interaction on a day to day basis. Due to this, HR should ensure their team & department leaders keep an eye out for the following behaviors and flag any suspected cases for a confidential discussion.

Denial– One of the most common effects of high levels of personal debt. People will ignore their situation and put off dealing with their problems. This may be hard to spot in the work place for a new employee but long term employees this will be easier to spot as it is out of character. This could lead to the issues becoming all the worse, and something may happen which results in them having no choice but to face up to the issues.

Not being able to sleep– Those with problems with personal debt may be living in a continuous state of worry and restlessness. This could cause them to be unable to sleep and come to work appearing tired and fatigued. It has been shown time and again that tiredness affects performance so this should be taken into consideration whilst doing appraisals.

Poor eating habits– Stress can also have an impact on your eating habits, with sudden weight loss and ill health being consequences resulting in lost days for employers.

Anxiety– It is common for people who have debt issues to feel anxious. They will worry about their phone ringing, about a knock on the door. Even opening post can cause a panic attack. This paranoia and anxiety can transfer over into the work place & affect business relationships and may cause your staff member to become isolated.

Anger– People who have debt issues can also become angry about their situations, and angry with themselves. They could even have misplaced anger with their employer, for not paying them enough, or angry at their loved ones for being a burden. It may also show up in the form of your employee being irritable when in work and snapping out of character.

Depression– A study we carried out told us that there was a connection between those in debt and those suffering from mental health problems. One such result of personal debt issues is depression. This is something that requires help and if left untreated can become a much larger issue. With stress depression and anxiety accounting for 11.7 million days lost to business per year, it is in the best interest of employers to take as best care of their staff as they can.
All of these behaviors will affect the performance of an employee negatively and as such it is HR’s duty to be looking for these issues so as to best manage them.

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Healthy vs Unhealthy Debt

Debt isn’t always a bad thing. In fact, there are types of debt that are seen as healthy debt, and types of debt that is seen as unhealthy debt. But what are the differences?

Healthy debt

Healthy debt can make your employee a valuable investment. This debt will have a positive impact on their life as a whole, or is necessary to move on stages in their life. It is often a longer term debt, one that can be repaid throughout the course of their life.
Examples of healthy debt include student loans, mortgages, business loans and investing into property. Healthy debt could also come in the form of consolidating existing debt and reducing the length of time that it is going to pay off, or perhaps put the debt into a lower rate borrowing account.

Unhealthy debt

In comparison, unhealthy debt is often the purchase of a disposable item, or one that does not have a long-term impact on their life.
These items are often bought on a high-interest credit card and then the balance is partially paid off every month but not paid off in full. Whilst they try to pay off the interest, the item that they have purchased is either used or loses value. This means they won’t make back what they paid out for the item.

Spotting the signs of someone struggling with Personal Debt

An employer has a duty of care to their employees. This may be in the form of providing them a safe working environment, and all of the facilities and equipment that they need to do their job. However, it can sometimes mean that you need to take an active role in helping their personal life and wellbeing.
Debt can have a huge impact on someone’s life and whilst sometimes it can be confined to their personal life, it can sometimes spill out into their professional life.
One sign that something may be happening with your employee is that they start to take less interest in work. Their performance may start to change, or they may not come to work at all. This will be a change of behavior for them, and something that is definitely noticeable.
Their behavior in itself may also change. They may start to become more withdrawn, spending more time alone and less time interacting with their colleagues. You may even find that they become more irritable, even getting into disagreements with their colleagues or customers.
These are signs that something is amiss in their personal life, and perhaps also an indication that you as an employer should become involved in helping them.

The impact of Proactive Management and HR

Debt is a personal issue and as such can be difficult for a person to open up about but in doing so they will be able to help themselves rather than ignoring the fact. If you have noticed some of the above signs in your staff, then your next step will be to decide how best to support them.
The first thing to remember is that it can be difficult for your employee to admit their issues to their boss. The situation should be approached carefully and with patience and empathy.
It is not a requirement for your staff to disclose any of the debt issues that they are currently facing; however, proactive management can help to create a sense of honesty and openness.
One easy way to do this is to provide information regarding free debt advice in the staff areas. You could also organise experts to come into your premises and lead workshops and advice groups regarding debt help.
Best of all, you should encourage your HR staff to showcase themselves as being approachable and ready to speak to employees, no matter what their issue is.
You should also make sure that your employees know that you care about helping them, and that you will treat all conversations respectfully and confidentially.

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Attachment of Earnings, Wage Arrestment and Finances role in helping with Debt

Since personal debt is not widely talked about it can be difficult to notice. One way that a creditor may try to recover debts that are owed to them is with an Attachment of Earning Order in England, Wales and Northern Ireland or an Earnings Arrestment in Scotland. This means that a set amount of money will be deducted from the salary of the employee and pay it directly to the creditors each and every month, subject to a minimum earning limit.
It is applicable when the credit company has a judgement against the person who owes the money and has been issued with a County Court Judgement (CCJ).
Attachment of Earnings or Wage Arrestment can help for debt to be paid back over a period of time. The amount to be paid back every month is set out by the credit company; however, it is designed to be an amount that the person in debt can cope with.
It also takes the control away from your employee and gives the control to you as an employer. Whilst the process can be paused, it is a process that should be taken seriously and is one of the last stages of debt recovery that someone can go through. If this happens with your employees, this needs to be identified early on in the process. By having the finance team flag cases like this, HR can take steps to approach employees and offer help as an employer by giving information and seeing what the firm can do to assist.

How you can help your employees cope with Personal Debt

As an employer, you will want to do your best to help your employees to cope with their personal debt issues. There are a variety of ways that you can help them.
We have already discussed some of the best approaches to take when you have an employee who is struggling with personal debt. This can come in the form of training, workshops, advice lines and developing a feeling of honesty and openness in the workplace.
Don’t forget to ensure that your HR staff are trained fully on what is needed to deal with these types of situations. One of the most important aspects has to be confidentiality. Your HR staff should be aware of how to approach personal situations such as debt confidentially and also speak to the person concerned with empathy and support. Your staff appraisals can be a good opportunity to discuss any issues you think your staff members may be having.
If your employees trust you, and trust that you will treat their issues with respect, then they are much more likely to come to you when they have some issues in their personal life.
Whilst they may be feeling angry, stressed or anxious about their issues, simply by discussing their personal debt issues, they may start to feel better about the situation.
They can start to build their lives back up, pay back what is owed to the credit companies and start to rebuild their credit rating, all whilst gaining the support and backing of their employer. This is something that will prove to be incredibly valuable to them in their time of need.

What Creditfix can do to help

As debt is a very personal issue, discussing it in a workplace environment can be difficult to approach. Creditfix are in a great position to help with individual cases as well as from a corporate level. From a corporate stance, by working with Creditfix, you can access information and packs that detail what effects personal debt has on your workforce and the monetary value that you lose by not approaching this subject. Depending on your needs as a company, we may also be able to run workshops and deliver in house talks on the best way of dealing with debts and engage with your employees. For more information on available services, please contact

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.

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