The warning signs have been around for a long time, but it seems as though the British public is in debt quicksand and has realised a little too late.

John Hall, chief executive, newtomorrow.com

Debt has been so freely available that it’s become a normal part of spending; and indeed critics of the government’s fiscal policy have regularly said the economy has lately been built largely on this foundation of cheap debt.

You have to see their point. The latest figures from debt charity Credit Action suggest that UK consumers are in the red to the tune of £1,409 billion, and digging themselves in further by £1 million every five minutes.

Impact of debt on employees

The upshot of this for employers is that there is an awful lot of people around who are constantly dragging around this millstone of personal debt. It’s impossible for this not to have an impact on performance at work, and I’d bet there are employees in just about every company who aren’t giving their best because part of their day is spent on the phone to creditors trying to sort out debts. Even if they’re not overtly using company time to address their personal cashflow problems, the very fact that they’re stressed about money will make it more difficult to carry out their jobs. That potentially means mistakes, missed deadlines, below-par customer service and absenteeism.

Debt awareness:

• Lenders appear to have had enough of missed payments, late payments and straightforward non-payments from people who have bitten off more than they can chew.
  
• It was recently reported that Egg froze the accounts of 160,000 of its customers, and mortgage lenders repossessed 27,000 homes last year – an increase of 21% on the previous year.
  
• Peaks and troughs, as they say, and it’s hardly surprising that, following years of cheap and freely available debt, the foundations are now looking slightly shaky – the wise man didn’t build his house on tick, after all (although he did build it on the rock, and we all know how stable certain Rocks have been of late).

HR assistance

So doesn’t that mean that it’s incumbent on employers to step in? HR is in a position to offer assistance to employees who are struggling in other ways, so why not debt? I’m preaching to the converted in saying that looking after the personal well-being of employees is a no-brainer, so if the rest of the board is rather shorter on humanity then appeal in the common language of currency. Happier workers mean better profits.

Staff debt counselling advice

See our 10-step management guide on how to assist with employee debt:
Employee debt advice | debt spiralling out of control