Rising Costs, Stressed Staff: Why HR Must Champion Financial Wellbeing

As the cost of living continues to rise, financial stress is now a reality for the majority of UK workers - and it’s taking a measurable toll on business performance.

For HR professionals, the challenge is clear: how do you support staff who are feeling the squeeze, while maintaining morale, productivity, and retention?

The answer lies in viewing financial wellbeing not as a fringe benefit, but as a core part of your people strategy.

Financial stress: a business-critical issue

Recent research suggests that financial anxiety is now costing UK employers over £10 billion a year, through a combination of absenteeism, presenteeism and reduced productivity. It’s estimated that more than six million workdays are lost annually due to money-related stress, with large organisations facing costs upwards of £500,000 a year.

The impact doesn’t stop at the balance sheet. When employees are preoccupied with financial concerns, their mental and physical health suffers, engagement dips, and performance declines. One study even found that financial stress can reduce cognitive functioning by the equivalent of 13 IQ points - a striking insight into how deeply money worries affect decision-making and output.

Yet despite all this, only around 18% of UK organisations currently have a formal financial wellbeing policy in place.

What HR can do - and why it matters

HR teams are uniquely positioned to take the lead on this issue. You already understand your people, their pressures, and the systems that support them. By making financial wellbeing part of your long-term strategy, you can directly influence how supported, stable, and successful your workforce feels.

There are several ways to start:

• Introduce financial education through workshops or coaching sessions
• Provide access to tools like salary advances, emergency loans or workplace savings schemes
• Signpost employees to free resources and embed wellbeing discussions into one-to-ones and appraisals
• Review your total reward offering, considering flexibility and relevance over headline numbers alone.

But beyond these tactical steps, there’s a bigger opportunity for HR teams to embed a culture of financial confidence - and that’s where professional development plays a powerful role.

The Tesco approach: wellbeing in action

One employer already reaping the rewards of this approach is Tesco, which has received national recognition for its financial wellbeing strategy. The supermarket giant has implemented a number of initiatives to support staff through economic uncertainty, including:

• A pay advance scheme, allowing employees to access a portion of their earned wages ahead of payday
• Multi-skill training, giving staff the chance to work across roles and increase their earning potential
• A ‘Sharesave’ scheme, which enabled over 52,000 employees to collectively gain more than £30 million through investment growth
• Cost-saving benefits like discounts, cycle-to-work schemes, and regular pay-day communications.

Tesco’s success highlights a crucial point: financial wellbeing isn’t just about offering more money. It’s about creating structure, flexibility and opportunity, which allows staff to make better financial decisions and feel more in control of their futures.

Developing HR teams who can make the difference

So how can other employers follow suit? One powerful route is to invest in CIPD HR qualifications.

These programmes range from beginner to degree-level and equip HR professionals with the knowledge and tools to lead financial wellbeing strategies from within. Learners will discover how to design inclusive policies, deliver meaningful support, and align wellbeing initiatives with broader organisational goals. Crucially, they also progress into better-paid, more senior roles - improving their own financial resilience while strengthening their organisation’s capability.

In other words, supporting your people to grow through HR qualifications is a direct way to build a team that’s equipped to help others thrive, too.

The long-term return

The business case speaks for itself. For every £1 invested in mental health and wellbeing initiatives, employers typically see a return of £5 through improved retention and reduced absence. Clearly, teams that feel supported are more loyal, more engaged, and more productive.

In uncertain times, investing in your people’s financial wellbeing isn’t just compassionate - it’s commercial sense. And by training your HR team, your organisation can embed this support at every level.