Alleviating financial stress: A key strategy for retaining hospitality talent
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The UK has one of the highest employee turnover rates in Europe, with the hospitality sector among the hardest hit.
Given that replacing an employee can cost an estimated 6–9 months of their salary, improving staff retention remains a top priority across the industry.
High turnover in hospitality is nothing new. Employees cite long hours, high-pressure environments, limited career progression, and low pay and benefits as common reasons for quitting. But an increasingly significant factor underlying these challenges is financial stress. So how can employers better support their staff’s financial wellbeing, and, in turn, boost retention?
Financial stress: a pressing challenge for hospitality
Financial stress is taking a toll on hospitality workers, with more than three-quarters (76%) reporting mental health struggles in 2024 – up from 56% in 2018 – according to UK charity Hospitality Action.
Given the ongoing cost of living crisis, this rise is hardly surprising. Looking ahead, both mental health and financial concerns rank among the top three challenges workers expect to face in the next 12 months.
The impact goes far beyond staff turnover. Financial stress can lead to reduced focus, lower productivity, increased absences, and declining morale, all of which affect service quality, customer experience, and ultimately, a business’s bottom line.
The industry is making strides in tackling these challenges. Training programmes are equipping workers with new skills, creating pathways to higher-paying roles. Efforts to enhance the sector’s reputation as a stable and credible career choice are gaining traction. Financial wellbeing initiatives, such as earned wage access, are helping employees manage their cash flow more effectively.
However, employers themselves are facing financial pressures. With national insurance increases set for April and the Employment Rights Bill on the horizon, many businesses simply cannot afford across-the-board pay rises. In this context, finding alternative ways to support employees financially is more critical than ever.
Cost-effective solutions for addressing financial stress
It is possible to make small, strategic investments into employee financial wellbeing that can make a big impact.
Create a focus group, employee resource group or employee survey, to open up conversations about money and better understand what financial challenges your team are facing.
Provide educational resources and practical webinars specifically targeting these challenges.
Signpost to free, external financial guidance and support, like debt advice charities or Money Helper.
Empower your employees by making them a part of the solution. Equip staff with the skills, resources and confidence to help their colleagues handle money-related stress, through programs such as Money First Aid.
Acknowledge awareness days throughout the year related to financial stress, like Debt Awareness Week or Talk Money Week, and empower your teams to setup activities around these dates.
The benefits of addressing financial stress
Employees who feel financially supported are less stressed, more engaged, and more productive.
his leads to higher retention, reduced absenteeism, and a stronger workplace culture. Financially supported employees are also less likely to be job hunting, and 73% say they’d be drawn to an employer that prioritises financial wellbeing. Offering support not only helps retain staff but also attracts new talent, enhancing employer reputation.
Investing in financial wellbeing creates a more stable, committed workforce. In a sector where retention is a challenge, supporting employees’ financial health is a low-cost way to improve morale, boost performance, and build a reputation as a responsible employer. At a time when stress and mental health are key concerns, financial wellbeing could be hospitality’s new secret weapon.
Learn more about Money First Aid
MONEY FIRST AID’s online course trains critical members of your team in financial first aid so they can support colleagues facing financial difficulties. As a new, essential skill in today’s workplace, get in touch to learn how the training can support your business.
