Introduction
Foreword by Gethin Nadin
Research methodology
Meet our expert contributors
Chief Innovation Officer, Zellis
The current cost of living crisis is impacting a rapidly growing number of employees across the UK and Ireland, with high inflation and rising interest rates putting more and more households under serious financial strain.
We found that more than three quarters of employees have experienced financial stress and anxiety over the past 12 months.
For many, this will be having a damaging effect on their mental and physical health and their relationships with family and friends.
The consequences of heightened financial stress are increasingly extending into the workplace. Employees worrying about their finances often see their sleep impacted, become more error-prone, are less able to make good decisions, and struggle to communicate effectively with their colleagues.
This research shows the clear link between financial wellbeing and ability to perform. More than half of those who have experienced financial stress over the last year admit it reduced their output at work.
This finding alone should ring alarm bells for all employers (and for the Government), given that UK productivity was trailing its economic rivals long before the current cost-of-living crisis. Since the 2008 financial crash, UK productivity has been far slower to recover when compared to its OECD counterparts [1], and was disproportionately affected by the Covid-19 pandemic [2].
Since understanding income and outflows is crucial to financial planning, our research shows that people have become more engaged with their pay and regularly checking their payslips. The problem remains, however, that many people simply don’t understand what their payslip is telling them. They’re alienated by technical terms and acronyms, overwhelmed by detail, and unsure about what options they have to make changes. This problem is compounded by the finding that many people are not confident in asking questions and raising concerns about their financial health with their employers.
We found younger workers are more likely to be experiencing financial stresses in the current environment, but less well-equipped to deal with it. Employees under the age of 35 are less likely to check their payslips, less able to spot errors, and less confident about raising financial issues with their employer. They are also hardest hit when a payroll error does occur.
Employers (and the payroll industry itself) have long recognised the need to instil greater clarity, accessibility, and transparency in the payroll process. The most important thing is to pay people the right amount, on time, each and every time. But to support this, it’s important to open accessible and confidential channels where employees can ask questions without feeling uncomfortable.
There is now an undeniable case for payroll to grow into its role at the centre of the employer’s financial wellbeing strategy. If employers are serious about helping their people through the worst cost-of-living crisis for a generation (and the vast majority undoubtedly are), then they have to start recognising that payroll is a critical place where you can most directly help people to manage their finances and tackle financial stress.
I hope you find this research useful. If any of the issues raised by this study feel particularly relevant to your organisation, we’d love to hear from you.
All research was conducted by Insight Avenue in July 2023.
Note: Totals in charts/tables for single-coded questions sometimesadd up to more or less than 100% due to rounding.
Zellis commissioned comprehensive independent research among a wide cross-section of the workforce:
2,502 online interviews with employees in the UK and Republic of Ireland who were non-management level.
The respondents worked for organisations of all sizes, with 52% working for companies with 1,000 or more employees.
Respondents worked for organisations in a wide range of industries including healthcare, government, public sector, retail, hospitality and leisure, transport, manufacturing, and financial services.
72% of respondents worked full-time and 28% worked part-time.
58% were on a fixed salary and 42% were paid on an hourly basis or at a variable rate.
The following people provided interviews to add context and insight to the research data. We are grateful for their input and support.
Head of Impact and Inclusion, Wagestream
Emily is Head of Impact and Inclusion at Wagestream where she leads work to tackle financial exclusion and build a more inclusive app that improves workers’ financial wellbeing. The role brings together stakeholders across policy, public sector, and financial services. She also runs the company's programme of academic research in collaboration with leading think tanks and global universities. Before joining Wagestream, Emily co-founded a social impact fintech, Touco Lab, which built financial services products for people with cognitive impairments using open banking technology.
The award-winning psychologist has been helping some of the world’s largest organisations to improve employee experience and wellbeing for two decades. Gethin has been featured in major titles including Forbes, the Guardian, and Financial Times; listed as a Top 101 Global Employee Experience Influencer; and named HR Most Influential Thinker 2023. He has authored two bestselling books: A World of Good: Lessons From Around the World in Improving the Employee Experience and A Work In Progress: Unlocking Wellbeing to Create More Sustainable and Resilient Organisations. He also co-authored The Humane Office.
Non-Executive Director, Zellis Chief People Officer, EMIS Health
Jacqui Summons has extensive international HR experience gained during more than 30 years in CHRO and senior HR positions, at leading global organisations including GlaxoSmithKline and Standard Chartered. In her current role at EMIS Health, she led the HR response to the pandemic at EMIS, successfully navigating through the impact in the UK and India. She also brings her expertise to the role of non-executive director at the UK and Ireland’s leading payroll provider, Zellis.
