Can employers solve financial stress when work is part of the cause?

By Tracey Paxton is Clinical Director and advanced clinical practitioner of Perkbox

A lot of people assume financial stress begins and ends with what is in someone’s bank account or appears on their payslip. Rising living costs, mortgages and household bills clearly contribute to the strain, but they don’t tell the whole story. After more than 35 years working across the NHS and independent healthcare, I have come to see financial stress as closely connected to how safe, secure and supported people feel while trying to manage life’s pressures.

Employers cannot control the wider economy or solve every employee’s financial situation. They can, however, influence how work is experienced. A workplace can provide stability, fairness and support, but there is the other side of the coin. If work is managed poorly, it can unintentionally add to the uncertainty people are already carrying.

Financial wellbeing begins with certainty

When we hear the phrase financial wellbeing, we often think of financial education, salaries, discount schemes or debt advice. These initiatives all have value and can make a real difference, particularly for people who are struggling. However, employees can be in very similar financial circumstances or on comparable pay, yet experience completely different levels of stress.

A crucial difference is whether they feel they have some certainty and control over their situation. Do they know where they stand? Do they trust the decisions being made around them? Do they feel valued? Can they see a future for themselves within the organisation? These questions shape an employee’s sense of security and can have a significant influence on their mental health.

People can often cope with difficult situations when they understand what is happening and feel some degree of control. Uncertainty tends to cause the greatest psychological strain. When people do not know what is coming next, it is human nature to imagine the worst. We create our own version of events, filling gaps in our knowledge with what we fear may be happening or what we believe could happen in the future.

People are rarely overwhelmed purely by today’s problem. More often, it is uncertainty about tomorrow that keeps them awake at night. That uncertainty might concern their finances, job security, working hours or organisational change. If work

is contributing to that uncertainty, an employer cannot expect a financial wellbeing initiative alone to resolve the resulting stress.

Are employers treating the symptoms or the cause?

Employee Assistance Programmes, mental health first aiders and financial wellbeing initiatives all have an important role to play. Employees value them and can receive considerable support through them. However, they should not be expected to compensate for workplaces that routinely create avoidable stress.

We need to ask this: Have organisations become very good at supporting people once they are overwhelmed, without examining what contributed to them feeling that way in the first place? What’s more, financial stress can be generated or intensified by uncertainty. This could be working hours, perceived unfairness, inconsistent communication, poor management, limited opportunities for progression or the feeling that decisions are happening to someone rather than being discussed with them.

None of these factors directly reduce a person’s income. They do affect how secure that person feels, and that sense of insecurity inevitably affects their wellbeing. This is particularly important during periods of change. Even where an individual’s immediate financial circumstances remain the same, change can naturally make planning feel more difficult. Providing clarity where possible, acknowledging uncertainty where it exists, and making practical financial wellbeing support easy to access can all help people feel better equipped to navigate that uncertainty.

The health consequences are real

As a result, ongoing financial pressure can have serious consequences for both mental and physical health. People experiencing financial stress often report poor sleep. They may lie awake worrying about bills, replaying conversations from work or trying to calculate how they will make ends meet until payday.

Over time, the lack of restorative sleep starts to affect other areas of their lives. People can find it harder to concentrate, become more emotionally reactive and struggle with decision-making. Their ability to cope with everyday challenges gradually diminishes. Prolonged stress can also contribute to anxiety, low mood and burnout, as well as increased sickness absence. Some employees will continue coming to work despite struggling because they feel they have no other option. This can lead to presenteeism, where somebody is physically at work but cannot perform at their usual level, alongside absenteeism and lower productivity.

The consequences reach far beyond an individual employee. When workplace conditions are adding to employees’ stress, the organisation is likely to feel the effects through absence, disengagement and reduced performance.

Leadership shapes how work is experienced

Leaders cannot resolve an individual’s financial circumstances or national economic pressures. However, they can help reduce unnecessary uncertainty. That means communicating honestly and regularly, explaining decisions, acting fairly and helping people feel seen, heard and valued. It also means recognising that silence or inconsistent information creates a space that employees will often fill with their own worst-case assumptions.

Leaders should think carefully about whether employees know what is expected of them, understand how decisions are made and feel able to raise concerns. They should also consider whether people can see opportunities to develop and progress within the organisation. These aspects of working life may sit outside a traditional financial wellbeing programme, but they have a direct influence on whether employees feel secure and in control.

Wellbeing is created through everyday experience

The way we think about workplace wellbeing needs to change. For instance, initiatives that show ‘evidence’ of being a good employer are undoubtedly important and employees gain great value from access to mental health support, financial guidance, discount schemes and other practical services. However, the existence of those benefits are not proof that the wider workplace is healthy.

Wellbeing is shaped by an individual’s experience every day they come to work. It is created through workplace culture: the conversations they have, the decisions made, how those decisions are communicated, and the way they’re treated.

Employers cannot remove every source of financial stress from people’s lives. But they can avoid uncertainty, unfairness or insecurity to the pressures employees already face. While organisations making the greatest difference may not always be those with the longest list of wellbeing initiatives, isn’t it time to create fewer reasons for people to need those initiatives in the first place? I believe it is.

Disclaimer: The views expressed in this opinion piece are those of the author and do not necessarily reflect the views of The Well Crowd. This content is for information and discussion purposes only and should not be taken as medical, health, or professional advice.