Why financial wellbeing can be the key to combatting the real cost of Christmas
5 January 2024
According to Statista, the total value of seasonal sales in the UK for Christmas 2023 is expected to be £85bn, with recent research by Citizens Advice revealing that 1 in 4 adults in the UK have chosen Buy Now Pay Later (BNPL) options to help with festive spending. Almost a third (29%) of BNPL users have also borrowed money to repay their instalments – meaning their initial debt has now become even more debt.
While BNPL can be a useful tool for those who wish to purchase a larger item and spread the cost, it is important that people remain in control of their spending, so they do not become stuck in a vicious circle of repayments – especially at a time when many people are feeling the pressures of rising costs. According to the Financial Conduct Authority, the number of individuals who felt that making payments to cover bills and credit commitments was a ‘heavy burden’, has jumped from 7.8 million to 10.9 million.
As the festive decorations come down and people sit back to count the cost of Christmas, those who now find themselves in a difficult financial position may have challenging decisions to ensure they get back in the black. Decisions which may not just impact their personal life but also their professional life too.
While the majority of individuals opt for honest ways to make repayments, unfortunately others may resort to abusing of their position as an employee to reduce debts – a dishonest act that is increasing. The most recent Cifas Internal Fraud Database figures show a 74% rise in staff theft from employers.
The time to combat internal fraud is now
As organisations reopen their doors for 2024, there has never been a better time for employers to take a fresh look into workforce operations, in particular what more they can do to support their employees. After all, focusing on employee welfare may not only alleviate an individual’s money worries, but it can also help to reduce the risk of staff financial concerns developing into attacks on the organisation. A key place to start is to understand the reasons why an employee might commit internal fraud:
- Opportunity: Without sufficient internal controls in place, an organisation is at risk and could open the door for individuals to exploit gaps.
- Motivation: If employees are unhappy and not getting the support they feel is required from their employer, this could be enough of a catalyst for them to consider committing internal fraud.
- Rationalisation: Individuals who believe they can pay back stolen funds or justify a theft because it is a “one off” or “everybody does it”, may adopt the attitude that a dishonest act is an acceptable thing to do.
For employers keen to combat the threat of internal fraud and theft, it is crucial that employers engage with their staff on financial wellbeing.
Financial wellbeing should no longer be seen as a taboo subject as it has a powerful influence on how employees behave – from impacting their ability to concentrate and perform in their role, to increasing their vulnerability to approaches to commit insider fraud and providing the motivation and rationalisation to commit dishonest conduct.
Supporting workforces by ensuring employees are made aware of the help that is available to them – both internally and through external resources such as the Money and Pensions Services – is critical for employers who want their organisations to thrive. Normalising workplace conversations around financial wellbeing can also ‘open the door’ for employees to feel they have a safe space to talk about money struggles and ongoing worries.
In times of financial difficulty, employers can prove pivotal in how they alleviate fears – helping employees understand it is okay to seek help and to know where to go to get the support they require. Having those honest conversations and transparent processes in place within your organisation can help to reduce the risk of internal fraud, support staff wellbeing and develop a thriving workplace culture. Employers can also read our blog for some further helpful advice.
To find out more about the important work we are doing to help organisations combat the insider threat, visit here. Additionally, look out for more information on our Insider Threat Week 2024 event, which will be released in the coming weeks.
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