Cost of living crisis continues to impact business performance as employee wellbeing declines
Small businesses across the UK are still grappling with the lingering effects of the cost of living crisis, with new data revealing concerning trends in employee performance and wellbeing.
While inflation figures show signs of stabilisation, HR experts warn that both employers and employees remain under significant financial pressure, creating a perfect storm for workplace productivity and morale issues.
Tara Anstee HR consultant at Zest HR says that businesses need to recognise how financial stress is affecting their teams before it leads to more serious performance problems.
“Many business owners are so focused on their own financial challenges – rising operational costs and tighter margins – that they’re missing the warning signs among their staff,” said Tara.
“Recent surveys show that 68% of employees are experiencing high levels of anxiety about their finances, with 42% reporting that these worries regularly distract them at work. What’s particularly concerning is that most don’t feel comfortable discussing these issues with their employers.”
According to the latest Workplace Wellbeing Report, businesses are seeing measurable impacts, with a 23% drop in engagement scores among employees citing financial concerns and a 31% increase in unplanned absences.
Tara added, “The data clearly shows that when employees are preoccupied with financial worries, productivity suffers. We’re also seeing concerning retention patterns, with 37% of employees who left their roles in the past six months citing financial pressures as a contributing factor.”
Despite these challenges, Tara emphasises that there are practical, low-cost strategies that can make a significant difference:
“Supporting employees through this period doesn’t necessarily require large financial investments.
Creating safe spaces for open conversations about financial wellbeing, offering more flexible working arrangements to help with commuting costs and conducting regular wellbeing check-ins can all help employees to feel valued and supported.”
Tara warns that businesses ignoring these issues risk facing more significant challenges down the line.
“What we’re seeing now is just the tip of the iceberg. Without intervention, these initial performance dips can evolve into more serious issues like burnout, increased turnover and long-term absence – all of which have much higher costs for businesses.”
Zest HR is currently offering free 30-minute consultations for businesses concerned about these issues.
These sessions focus on practical strategies that can be implemented quickly to support both business performance and employee wellbeing during this challenging period.
For more information or to book a consultation, visit our website or contact us here
Zest HR specialises in providing outsourced HR services to small and medium-sized businesses throughout Hampshire.