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Survey finds link between financial pressures and employee underperformance

  • UK

25% of employers report an increase in sickness absence

A new survey by WorkNest, an employment law and HR consultancy firm, has revealed the link between financial pressures and employee underperformance. The survey found that nearly half of the employers surveyed believed financial pressures were one of the main external factors impacting employee underperformance, with homeworking, childcare responsibilities, and time management also cited as key factors.

The survey also identified mental health and work-related stress as significant internal drivers of underperformance, with almost one-third of employers identifying it as a cause for concern. Additionally, ineffective leadership, poor conduct, and lack of formal training were also found to be factors affecting employee performance.

Danielle Scott, Employment Law Adviser and Solicitor at WorkNest, said that employers must recognise financial pressures due to the rising cost of living as a major factor in employee underperformance. Scott emphasized the importance of open communication and building relationships with employees to identify and address the real issues that impact their team’s performance.

Employers also expressed concern about their line managers’ ability to handle conversations about underperformance, with 27% reporting that they had provided inadequate training. The impact of mishandled conversations can be significant, with 25% of employers finding that grievances crop up out of the blue or see an increase in sickness absence.

Scott added that employers must take action by providing line managers with training and guidance on how to address these situations. Regular reviews with an employee on performance management can increase employee engagement and motivation while providing clarity on individual and team objectives. Line managers can also identify training gaps and development opportunities for team members requiring extra support.

The survey’s findings highlight the need for employers to recognize and address the external and internal factors impacting employee performance. By prioritizing open communication, providing adequate training, and regularly reviewing employee performance, employers can improve productivity and reduce the risk of grievances and absenteeism.

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Financial worries affect the productivity of more than one in four

More than a quarter a seeking help to cope with stress

Financial worries are top the list of factors affecting workers’ productivity. This is according to a new survey conducted by the Joseph Rowntree Foundation. The survey revealed that almost one-third of workers (approximately 8.2 million people) said they experienced low work productivity due to financial concerns. A further 31% said that they expect a similar scenario within the next year. With the country facing a massive cost of living crisis, these figures are no surprise.

According to the study, 20% of the British public (13.4 million people) were already living in poverty in 2020/21, with 7.9 million being working-age adults. The projections were also not positive. The New Economics Forum estimates that by December 2024, 43% of UK households will not be able to afford a decent standard of living.

The survey found that 40% of workers have experienced physical and mental strain due to their financial pressures a further 32% lose sleep. In addition, a quarter of respondents reported feeling depressed.

For those who are affected mentally:

  • 26% are seeking help to cope with stress
  • 20% expect to speak to a mental health professional or receive counselling
  • 19% plan to seek advice from their GP

The mental health crisis in the UK is growing, with the waiting list for mental health patients at a record 7.2 million and a waiting time of 47 weeks, according to data from October 2022.

The British public are looking for appropriate pay increases to deal with soaring prices. The respondents were asked to choose a suitable increase from 1% to 12%.

34% said a 5% pay rise sounds ‘about right’

34% felt the same about a 10% rise

People who voted for Tories in the last election found 5% to be fair (41%)

People who voted for Labour said 10% would be appropriate (43%)

Retired Brits also agreed with the 5% rise (35%)

Jonathan Merry, CEO of Moneyzine.com, commented: “The figures paint a grim picture, but also show how much employers need to rehash their duty of care policies and refine their outreach to struggling employees. Although limited in their power, firms need to keep their ends up to support their workers in these testing times.”

Read the full article here.

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Rebecca Fender, Head of Strategy and Governance for Research, Advocacy, and Standards at CFA Institute

Trust in financial services reaches new heights

Study finds that young investment professionals have highest levels of trust

According to the CFA Institute’s 2022 Enhancing Investors’ Trust Study, levels of trust in the financial services industry have reached an all-time high in 2022. The study measures trust levels in financial services among retail and institutional investors in 15 markets, as well as the factors that drive trust.

Some of the findings included:

  • Levels of trust increased from 65% to 86% across all generations of institutional investors in 2022.
  • Millennials, especially 25-34-year-olds, have the highest trust (72%) in financial services.
  • Technology plays an important role in enhancing trust by allowing advisers and managers to offer transparency, simplify access to markets and products, and align product offerings with clients’ needs.
  • Over 70% of millennials prefer technology platforms and tools over human help with their investments strategy.
  • Only 30% of respondents over the age of 65 prefer technology platforms.
  • 58% of retail investors with advisers are keen to try new investment products compared to 37% of investors without an adviser.
  • 56% of retail investors believe that access to technology platforms and tools to execute their investment strategies will be more important than access to human assistance in the next three years.
  • 92% of retail investors aged 25-34 trust digital nudges or push notifications from providers about new investment opportunities.
  • 80% of respondents trust the completeness and accuracy of information from retail apps.
  • 75% stated that retail tools and apps increased the frequency of trading.

Rebecca Fender, CFA, Head of Strategy & Governance for Research, Advocacy and Standards at CFA Institute, and lead author of the Trust Study, commented: “The highs we’re now seeing in investor trust are certainly cause for optimism, but the challenge is sustaining trust even during periods of volatility. Our ongoing examination of the dynamics required to build and maintain investor trust reveals what investors need from their advisors and managers through the highs and lows of market cycles. Technology, the alignment of values, and personal connections are all coming through as key determinants in a resilient trust dynamic.”

“The under-44s, and particularly millennials, are leading the way in their use of technology and in their desire for personalized products. This investor cohort has relatively high trust in robo-advice, digital apps, and digital nudges such as alerts about new investment opportunities, and they are using online platforms to execute their investment strategies. They are also eager to use investment products that allow them to invest in line with their personal values, including sustainability and ESG preferences. Climate change and clean energy are the top ESG priorities for retail investors, while institutions are focusing on data protection and privacy, and sustainable supply chain management.”

With the first generation of digital natives now a part of the financial services market, it seems that technology is fast becoming the default way to execute investment strategies.

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SThree reports record performance

The recruitment specialist’s contractor order book is up 43% year-on-year

SThree, specialist recruitment firm reported “record performance” this week with net fees rising 19% at constant currency year-on-year to £355.7m – a reported all-time high for the business.

The London-listed firm reported “strong” global growth with 23% in Germany, 24% in the US, and 19% in the Netherlands. Those three are SThree’s largest markets and account for 74% of the group’s net fees.

Contract and permanent net fees were up 17% and 24% year-on-year, respectively, with contract net fees representing 75% of group net fees, compared to 76% in 2020, with the contractor order book up 43% year-on-year.

The group also reported a record adjusted profit before tax of £60m, up 111% year-on-year.

The board described the balance sheet as “robust”, balance sheet, with net cash totalling £58m at year-end on 30 November, up from £50m at the end of the 2020 financial year.

It proposed a final dividend of 8p per share, up from 5p a year earlier, taking the full-year dividend to 11p from 5p year-on-year.

That was in line with the company’s dividend cover target of between 2.5x and 3.0x, as previously communicated.

SThree reported that the strength of its contractor order book and recent trading was tracking ahead of expectations, with the directors now anticipating double-digit net fee and profit growth for 2022.

On the environmental, social and governance front, they said its renewables business – accounting for 6% of net fees – was up 22% from 2020, which was ahead of its target to double the share of that business from 2019 to 2024.

Timo Lehne, interim CEO of STHree commented: “Our record-breaking full-year performance reported today demonstrates that we have a robust strategy focusing on STEM and flexible working, implemented by a talented management team, and the hard work of our people globally. As the market rebounded in 2021 following the impact of COVID-19, we saw demand for STEM skills increase across all of our key markets.

“Whether it is engineers building green infrastructure, developers aiding digital transformation or the scientists helping to develop the next life-changing drug, we are proud to have placed more than 22,000 skilled people and, combined with our ESG efforts, we impacted over 33,000 lives this financial year.”

“We are well-positioned, we demonstrated our ability to navigate through unforeseen challenges, such as COVID-19, and we continue to evolve our delivery model.”

The CEO said it would further invest in its infrastructure and people in 2022, to enhance its platform and drive accelerated margins in future years.

 

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Julia Robertson, Impellam CEO

Impellam Group H1 revenue rises 6.3%

  • UK

UK staffing firm Impellam Group plc reported revenue today for the six months ending 2 July 2021 of £1.09b, an increase of 8.2 percent on a like-for-like basis when compared to the previous year.

Revenue reportedly grew in the first half of the year as trading recovered in the US, UK and Europe regions after the impact of the pandemic from Q2 2020. US and UK operations saw the strongest gross profit growth over the half year, up 13.3 percent and 9.9 percent respectively, while APAC is still impacted by COVID-19 and declined by 10.6 percent.

The Group reported a temporary recruitment gross profit increase of 6.8 percent and permanent recruitment up 33.7 percent; with permanent recruitment now making up 10.6 percent of gross profit.

Julia Robertson, Chief Executive Officer of Impellam, said, “Our H1 performance has surpassed expectations. We started 2021 with a degree of optimism following the decisive moves we made in 2020 to re-shape our business for the long term by transforming and de-layering our business to free up our virtuosos to do what they do best, finding good work for people and people for good work.”

“However, almost immediately, the UK was placed back into lockdown and schools were closed meaning that we reverted to the well-trodden home working patterns of 2020 with practised speed and agility,” Robertson said. “With a simplified regional business structure and reduced management layers we have reacted quickly to changing end-market conditions and have made significant investments in digitalisation and new virtuoso fee earners whilst retaining the substantial cost base savings from the transformation of our business in 2020.”

 

If you have any interesting news to share, please email the Editor at Debbie.walton@talintpartners.com

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Pandemic pushes employers to focus on financial wellbeing

  • UK

Employers believe they are doing a good job at supporting their workers’ retirement savings but recognise they are lacking when it comes to other areas of their financial wellbeing.

This was the finding of a study of 171 UK organisations conducted by Willis Towers Watson between February and March of this year.

According to the company’s Future of Financial Wellbeing study, 76% of employers believe that their employees want them to be more proactive in helping improve their financial standing, while 36% thought the pandemic had had a negative impact on their employees’ finances.

Richard Sweetman, financial wellbeing lead at Willis Towers Watson, said: “Organisations realise employees are currently facing a wider array of financial challenges and are looking to evolve from a focus on helping employees save for retirement, to adopt broader financial wellbeing programmes that provide the help they need.

“Many employers are now accelerating their focus on financial wellbeing in response to COVID-19, and the associated economic impacts.”

Looking beyond retirement​

Although 47% of employers acknowledged that their employees face challenges saving for retirement, more than half (61%) were confident their retirement savings provision was sufficient.

However, there was widespread recognition than when it came to helping employees build emergency savings and manage day-to-day costs and debt, there was a lack of support. About half of the employers surveyed said they intended to provide assistance in these areas over the next two years.

“Debt and the ability for employees to make ends meet should be a particularly important area for employers to focus on, with almost a quarter of employees seemingly affected. We know from employee research that when these issues do come up, they have a particularly detrimental impact on mental health and wellbeing,” said Sweetman.

Specifically, employers said they were planning to introduce at least one extra workplace savings option within the next two years. At present general savings or investment accounts, corporate ISAs and Lifetime ISAs are only offered by a small number of employers.

More comprehensive financial education is also on the agenda – online educational resources are already provided by more than half of employers, with a further third likely to introduce these in the next two years.

Photo courtesy on Canva.com

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