Know how to help staff with financial difficulties

The helpline of debt charity Consumer Credit Counselling Service (CCCS) received more than 335,000 calls last year, and the charity, despite headline claims that the recession is over, expects to see a lot of people in difficulty in the coming months. And CCCS is not alone; other consumer organisations believe the worst is yet to come, and that as soon as interest rates go up (as they inevitably will), many more people will find themselves struggling.

Debt is an emotional as well as a financial problem, taking a high toll on health and family life, and hence on work performance.

Those working in HR are in an ideal position to spot signs that might indicate a member of staff is in financial difficulty, such as higher-than-average sick leave, a request for a pay rise due to financial need, or an employee accessing an organisation’s hardship fund. They are also best placed to be able to help them, by providing advice, support and training.

Expert’s view: Lesley Cheeseman, head of training and development, Consumer Credit Counselling Service

What are the biggest challenges? The main challenge in helping employees deal with their financial problems is having them admit they have a problem in the first place. Unmanageable debt can be so overwhelming that it can be hard to face up to. In practice, the sooner they seek help, the sooner strategies can be implemented to reduce the impact of debt. What should you avoid doing? Avoid adopting a judgemental attitude. The employee concerned is likely to already be blaming themselves for their situation – but debt is something that can happen to anyone. Top tips Actively look for signs that an employee has financial concerns. Make sure that the rest of the HR team know that this is likely to be an emerging issue, and show them how to spot the signs too. Develop your own and the rest of the team’s debt advice skills – this should include the causes and types of debt, the emotional impact, and a basic understanding of the solutions available. Let employees know the HR department is willing and able to support staff with debt problems.

This is not always easy. Employees are likely to feel very private about finance and may be worried that their situation could have an adverse impact on their employability. Nevertheless, it is important to recognise that money worries could be behind erratic behaviour in the workplace and to have some understanding of how to deal with such situations.

Advice

HR professionals cannot be expected to be debt counsellors, but some comprehension of the main debt solutions available and how they work, such as debt management plans, token payments and Debt Relief Orders, will enable them to offer some reassurance to employees. Whatever the state of their domestic finances, the main aim must be to encourage employees to seek the help they need as soon as possible.

Support and empathy

Familiarity with the common causes of debt will help HR professionals understand and appreciate the reason for the employee’s situation and therefore help them empathise.

Debt is an emotive issue and an employee may become upset or defensive talking about money. It is important to be aware of the different emotions likely to be displayed and develop effective strategies to deal with these.

Empowerment

Empowerment is a crucial part of dealing with any debt issues. Giving employees the opportunity to take responsibility for actions to help remedy their situation will contribute towards re-building self-esteem and developing more confidence.

If referring someone to a specialist debt organisation, try to make the referral positive by providing lots of information about the service – for instance, the opening times and what the service will do for people seeking help.

Training

For a more long-term solution to help staff avoid personal finance problems, skills development could be used to help them learn better ways of managing their money, including practical tips on budgeting, reducing bills and maximising incomes. This could be used as part of an enhanced employer benefits scheme, with effective money advice training to help reduce stress and absenteeism as well as helping staff through tougher economic times.

Even staff not threatened with immediate debt problems will appreciate learning how to make their money go further.

If you only do 5 things

1. Make sure your staff are well-informed
   
2. Guarantee confidentiality for staff with concerns
   
3. Pre-empt problems by training employees
   
4. Research specialist debt organisations
   
5. Put a good policy in place.

Further information

• Debt Advice Handbook, Peter Madge, Child Poverty Action Group, £22, ISBN: 1906076464
  
• Counselling in the Workplace, Adrian Coles, £22.99, Open University Press, ISBN: 0335212115 

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