Mental & Financial Health: How & Why Employers Need To Act
Mental health is a subject that has long been confined to the shadows, but thankfully, that has changed in recent years. With an ever-increasing amount of people discussing their struggles publicly, society as a whole is beginning to recognise the ubiquity of mental health issues, but much work remains to be done.
When it comes to improving our mental health, there are no quick-fixes or one-size-fits-all approaches. Addressing these issues requires action on the part of experts, politicians, the general public, and you, employers. Every one of us has our own part to play in reshaping society’s approach to mental health, so we’re going to look at how employers can help by addressing one of the most-common sources of mental anguish: finances.
Recent Studies
Research published in December 2018 found that a staggering 95% of workers in Ireland are worried about their finances, with 54% saying that these worries are affecting their mental health & wellbeing. The study also found that 47% believed they would have no money to save after paying for essentials, and that 25% of people expected to be worse off financially in 2019 compared to 2018.
A study conducted by VHI as part of a series of reports on mental health in the workplace found that 21% of employees are “extremely or very stressed”, with 33% saying they are more stressed now than they were 2 years ago. These figures are reflected by the fact that, over the past 8 years, Ireland has slipped from 9th place to 20th in the OECD rankings for work-life balance. Clearly, despite the improving economy and the destigmatisation of discussing mental health, the nation as a whole has not been effectively addressing these issues.
What Employees Want Most
In today’s day and age, employers are not only expected to offer their employees more than just a basic wage, but also to provide help to their staff in the form of benefits. Most businesses that provide employee benefits will offer a variety, covering everything from gym memberships to on-site massages. But as popular as these benefits are, research shows that the most sought-after benefits among every age demographic are finance related.
For employees in both the 18-25 & 26-35 age groups, the number one concern is saving to buy a house, which also happens to be the goal that receives the least support from employers overall. For employees in the 36-55 & 56-77 age brackets, saving for retirement is their primary focus, which is the goal that is most-widely supported by employers.
Possibly the most important takeaway from these figures is the fact that employers have not really moved with the times. The concept of pensions has been widespread in Ireland since 1909, which helps explain why they are so commonly supported by employers. And among older employees, who probably already have a house and no childcare costs, it is easy to see why saving for retirement would be their main focus. But for those employees who have grown up witnessing an ongoing housing crisis, the system has not adapted, leaving them to fend for themselves in a world where it is harder than ever before to get your foot on the property ladder.
Employer Responsibility
According to VHI, despite the fact that 78% of employees believe mental health issues are on the rise, 67% also believe they are not doing enough to take care of their own mental health. Furthermore, not only have 61% never sought help, 50% believe doing so could harm their career.
While it would be unfair to lay the blame for these issues solely at the feet of employers, it would be equally irresponsible for employers to wash their hands of the role they play in a system that is obviously no longer fit for purpose. If we really want to address the issue of financial stress and the effect it has on our mental health in Ireland, employers need to look beyond their legal obligations and address the reality of what it takes for workers to make ends meet in modern society.
What to Do
Despite the fact that buying a house was the number one goal in the study, employees looking to do so receive less than half the support of those saving for pensions. This is just one example of the disconnect between what employers provide, and what employees actually want and need.
The easiest and most effective way to address this issue is by going directly to your employees. With the economy, society, and your workforce constantly changing, using an anonymous annual survey to see where people need help most will always yield more accurate results than assuming or guessing what will be most helpful.
Apart from offering short-term benefits to your employees, which could alleviate financial stress in areas ranging from childcare to transport costs, you also need to encourage your employees to start putting money away, and the easier you make it, the greater the uptake will be.
Available Schemes
Most people will be familiar with the idea of reducing their taxable income through employee pension contributions, but such schemes are not limited to pensions. The Save As You Earn (SAYE) scheme allows employers & employees to agree on an amount between €12 and €500, which will be deducted from their wages each month for a period of either 3, 5, or 7 years. At the end of the set period, employers can offer the employee a chance to buy shares at a discount of up to 25%, or the employee can simply take the money, paying USC & PRSI, but not income tax.
Stock-related compensation is another option whereby you may offer tax-free shares of up to €12,700 per employee, which the employee must retain for at least 3 years to prevent the application of tax.
For small-to-medium sized businesses, there is a programme in place until the end of 2023 known as the Key Employee Engagement Programme (KEEP). Shares awarded under this scheme are not subject to income tax, USC, or PRSI, but will be subject to capital gains tax (33%) when sold.
Society has made major progress in its attitudes towards mental health in recent years, but the open and honest conversations we are having now need to be backed up by action. We all have a role to play in making this happen, and employers in particular can have a major influence over the people on the ground. By focusing not just on the issues of mental health themselves, but also on the root causes, employers in Ireland can help transform society and make a real difference to our quality of life, one employee at a time.