Cost of living | The alarming link between financial pressure and employee performance

The alarming link between financial pressure and employee performance

Almost half of employers (46%) believe financial pressures are one of the main external factors affecting employee underperformance.

The survey conducted by employment law and HR consultancy firm, WorkNest, has also revealed that homeworking (17%), childcare responsibilities (14%), and time management (13%) were also cited as key factors affecting employee performance.

The survey also found that mental health and work-related stress were significant internal drivers of underperformance, with almost a third of employers (30%) identifying it as a cause for concern. In addition, ineffective leadership (28%), poor conduct (20%), and lack of formal training (15%) were uncovered as additional factors affecting employee performance.

“Employers must recognise that financial pressures due to the rising cost of living are now a major factor in employee underperformance,” said Danielle Scott, Employment Law Adviser and Solicitor at WorkNest.

How to turn your pension scheme into an employee retention tool

How to turn your pension scheme into an employee retention tool

Ambitious, high-growth businesses rely disproportionately on individual talent, so losing a key employee can mean taking a few steps back from hitting company objectives.

HR departments are under pressure to boost retention and yet they may not be aware of a key strategic lever in their attrition-busting arsenal - their workplace pension scheme.

Employees leave a role for a number of reasons: some you can’t control but a lot you can. According to our data, 90% of UK workers cite their company pension as the benefit that MOST influences their decision to stay in their role.

In this report, we will:

  1. Demonstrate how your pension supports your retention strategy

  2. The size of the opportunity and the cost of inaction

  3. How to create a pension scheme people will stick around for

  4. How to maximise value once up and running

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“By prioritising open communication and building relationships with their employees, employers can identify and address the real issues that impact their team’s performance, ultimately improving productivity and reducing the risk of grievances and absenteeism.”

Where challenges exist, employers also expressed concern about their line managers’ ability to handle conversations about underperformance, with 27% reporting they had provided inadequate training. If mishandled, the impact 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: “With over a quarter of line managers struggling to handle conversations about underperformance, employers must take action by providing them with training and guidance on how to address these situations.

"Conversations can be awkward if they don’t know how to approach them. By having regular reviews with an employee on performance management, line managers can increase employee engagement and motivation as well as provide clarity on individual and team objectives. Line managers also have an opportunity to identify training gaps and development opportunities through regular conversations for those team members that might require extra support.”

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