In the UK, workers are so worried about the cost of living crisis that it is affecting their performance at work, with two-thirds of managers reporting issues such as rising absenteeism and lack of engagement among stressed staff.
In a Chartered Management Institute (CMI) survey of more than 1,000 managers and team leaders, 71% said they had seen evidence that the crisis was increasing stress and anxiety in their teams.
Of these, 93% said it affected employee productivity. This represents 66% of all managers surveyed.
Forty-one percent of respondents noted “more distraction, less concentration and attention to detail,” 33% an increase in sick days or absences, and 31% a reluctance to take on extra work.
“We were very surprised to see how there were these very visible ripple effects,” said CMI policy director Anthony Painter.
“There seems to be some sort of bandwidth issue, where people are facing extreme money worries, and it’s reducing their field of vision, their ability to do their jobs well.”
He suggested that managers need to empathize with their struggling staff, and he urged employers to consider these impacts when negotiating staff terms and conditions.
“As an organization you can’t just treat this as an outcome issue. It is also a question of well-being and productivity,” he said.
Citizens Advice said it was helping two people a minute with crisis support – 50% more than the same time last year – with a growing share of its struggling clients simply unable to cover their expenses.
Some large employers have offered cost-of-living payments to their workforce to help them deal with short-term pressures. HSBC gave its lowest-paid staff £1,500 and Sainsbury’s recently said it would spend £25million to raise salaries and provide other benefits such as free food.
TUC general secretary Frances O’Grady said it should come as no surprise that employees find it difficult to leave their money worries at home. “Working families across Britain are worried about how they will pay their bills and put food on the table. It’s not something you can just turn off,” she said.
“Financial insecurity is bad for workers and bad for our economy. If we want to have a healthy and thriving workforce, people need to be able to earn a decent living.
The Chartered Institute for Personnel and Development (CIPD) said similar findings had been evident in its research, which showed many employers were concerned about the financial well-being of their staff.
Its Senior Compensation Advisor, Charles Cotton, said: “We encourage employers to focus on paying a fair and sustainable wage, providing financial wellness benefits and providing opportunities for career progression. work.
The CMI survey suggests that the effects of the crisis on working life seem to be most acute in the public sector, where a wave of strikes is looming in the weeks and months to come.
Among managers who said their staff were concerned about the cost-of-living crisis, 65% of those in the public sector reported a hit to productivity, compared to 57% in the private sector.
The average remuneration of the public sector increases at an annual rate of 2.2%, against 6.6% for the private sector, according to the latest official figures. With inflation measured by the consumer price index at 11.1%, this means that many workers across the economy are facing significant pay cuts in real terms.
The Office for Budget Responsibility (OBR) recently predicted a historic 7.1% decline in real household disposable income over the next two years as sky-high energy prices continue to weigh on living standards.
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