There is no mistaking the impact the cost-of-living crisis is having on the UK and as such, it’s becoming an increasing area of concern for employers.
As the UK reaches the highest rates of inflation since the early 1980s (opens a new window), the knock-on effect to consumers is substantial, with households hit hard as the price of goods and services continue to soar. The rising energy prices coupled with the cost of petrol is crippling the economy and with food prices, rents and mortgages also rising, many workers are already facing a real-terms pay cut (opens a new window) and in-work poverty (opens a new window). Subsequently, employers are rallying to support their employees as the cost-of-living crisis deepens, with millions struggling to afford the basics (opens a new window).
Data compiled by the Office for National Statistics (ONS) (opens a new window) showed that from April-May 2022 over three quarters of adults (77%) were worried about the increase in monthly outgoings. Staggeringly, this increased to 93% from August-September 2022. With the outlook for the future uncertain, more and more employees are turning to their employer for support.
The challenge to safeguard employee’s wellbeing
The stress many employees may be feeling due to their deteriorating financial situation can create physical and emotional health problems. A study by the Money and Mental Health Policy Institute (opens a new window) stated that 46% of people in problem debt also have a mental health problem, with 86% of respondents citing their financial situation had made their mental health problems worse.
And this isn’t something that just sits outside the workplace. With flexible and hybrid working, there is an ever-increasing blurred line between home life and work life. We have also seen a shift from the days when employers’ wellbeing programmes focused solely on employee’s physical health, to strategies that focus on the mental, emotional and financial health of their workforce.
Not only can the potential stress and subsequent health problems lead to a drop in productivity, but employees who are suffering from financial stress are also more likely to look for work elsewhere. Data from CV-Library from April 2022 (opens a new window) shows that as many as 77% of job seekers are open to changing roles to mitigate their increased living costs.
With inflation and the cost-of-living crisis impacting both people and businesses, it’s important for employers to look at optimising the benefits and provisions they currently have in place and to consider any impactful initiatives that can support employees, through improved financial and mental wellbeing.
Top tips for employers to consider
Foster an environment of open communication – Help employees open up about their concerns and worries. An inclusive open environment can help employees feel they are being listened too and helps create trust within a business.
Review your reward strategy – Are you able to pay a cost-of-living increase or a one-off payment to help support employees through difficult times?
Review your benefits offering – Have you made sure your employees are aware of all the core benefits available to them and, more importantly, any additional services your providers offer? Review this as part of your regular communication programme.Many employersdon’t realise the supplementary services that can be part of their benefits package. Employee assistance programmes can be a vital resource for employees to use if feeling overwhelmed and stressed.Access to counselling services can also help and offers support a cross a broad range of topics.
Leverage support from your benefit providers - Most providers offer support for employees in the way of webinars and communications. Make sure you speak to your providers to see what they can offer.
Provide financial education – Support your employees’ financial wellbeing through implementing a financial wellbeing policy that feeds into your wider wellbeing strategy. This could be as simple as signposting to free resources for money and debt management through to structured financial education programmes in person or via webinars.
Discount & reward schemes - Consider implementing discount & reward schemes to help employees save on their regular purchases. Most discount schemes can offer savings on food shopping, insurance and general household purchases.
Review flexible working policies- Do your employees need to be in the office fulltime? Consider reviewing how you manage work patterns. Can you allow more flexibility around where people work? Could you allow people to come in off-peak to save travel costs?
Mental Health First Aiders - Mental Health First Aid is a training course that teaches employees how to identify, understand and help someone who might be experiencing a mental health issue. This would be the employee’s first point of communication for any mental health related concerns.
Salary Exchange - Works by allowing employees to reduce their pay in exchange for benefits like cycle-to-work programmes, season ticket loans and increased employer pension contributions.
Interest-free travel or season ticket loans - Makes travel to work more affordable by spreading the cost of travel.
Buy/sell annual leave – Can work either way. Allowing employees to sell some days to receive some salary back could be a short-term measure but employer should be aware that employees should be encouraged to take regular breaks which could also benefit their mental wellbeing and reduce burnout.
For further information, please contact:
VP Pensions & Benefits, People Solutions
T: +44 (0) 7425 616647