Workers in the UK are becoming so anxious 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-out staff.
In a Chartered Management Institute (CMI) survey of more than 1,000 managers and team leaders, 71% said they had seen evidence of the crisis increasing stress and anxiety for their teams.
Of these, 93% said it was affecting employees’ productivity. That amounts to 66% of all the managers surveyed.
Nearly three out of four managers were seeing signs of stress and anxiety in their workplace
Forty-one per cent of the respondents highlighted “more distraction, less focus and attention to detail”, 33% increased sick leave or absence and 31% a reluctance to take on extra work.
“We were very surprised at the extent to which there were these very visible knock-on effects,” said the CMI’s director of policy, Anthony Painter.
“There seems to be a sort of bandwidth issue, where people are facing extreme money worries, and that’s narrowing their field of vision, their ability to do their work well.”
93% of managers who reported evidence of stress or anxiety among employees said it was affecting productivity
He suggested managers needed to be empathic towards their struggling staff, and he urged employers to think about such impacts when negotiating staff terms and conditions.
“As an organisation, you can’t just treat it as a bottom-line issue. It is a wellbeing and productivity issue as well,” he said.
Citizens Advice has said it is helping two people a minute with crisis support – 50% more than at the same time last year – with a growing share of its struggling clients simply unable to cover their outgoings.
Some large employers have offered cost of living payments to their workforce to help them cope with short-term pressures. HSBC gave its lowest-paid staff a one-off £1,500 and Sainsbury’s recently said it would spend £25m on increasing pay and providing other perks such as free food.
The TUC general secretary, Frances O’Grady, said it should not be surprising that employees struggled to leave their money worries at home. “Working families across Britain are worried sick about how they are going to pay their bills and put food on the table. This isn’t something you can just switch off,” she said.
“Financial insecurity is bad for workers and is bad for our economy. If we want to have healthy, thriving workforces, people need to be able to make a decent living.”
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A higher number of managers in public sector organisations signalled that their teams were ‘very concerned’ about the cost of living compared with the private sector
The Chartered Institute for Personnel and Development (CIPD) said similar findings had been evident in its research, which showed many employers were concerned about their staff’s financial wellbeing.
Its senior reward adviser, Charles Cotton, said: “We encourage employers to focus on paying a fair and livable wage, offer financial wellbeing benefits and provide opportunities for in-work progression.”
The CMI survey suggested the effects of the crisis on working life appear to be more acute in the public sector, where a wave of strikes is looming in the coming weeks and months.
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, against 57% in the private sector.
Average public-sector pay is increasing 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 prices index running at 11.1%, that means many workers across the economy are facing significant real-terms pay cuts.
The Office for Budget Responsibility (OBR) recently forecast a historic 7.1% decrease in real household disposable incomes over the next two years as sky-high energy prices continue to eat into living standards.