The current cost of living crisis in the UK has seen a record number of households face the biggest decline in income since the 1970s. The continued rise in the cost of living is due to several factors including the Covid-19 pandemic, rises in national insurance (NI) contributions, war in Eastern Europe, and skyrocketing energy prices.
Employees are grappling with the ever-increasing costs of housing, transportation, food, and other essentials, and this financial burden can significantly impact their overall wellbeing.
As inflation peaked at 11% in October 2022, the highest level in 30 years, employers experienced more stressed and distracted workforce due to the continued extra financial pressure on household incomes. Although inflation dropped down to 6.7% in September 2023, people continue to struggle with the day to day costs of living.
As an employer, there are several ways you can support your employees during these challenging times. In this blog, we’ll explore the various strategies and benefits you can offer to help your staff navigate the cost of-living crisis while maintaining their financial health and overall wellbeing.
In the first instance, TALK to your employees
Have a private conversation with your staff to find out if they are worried about the rising cost of living and find out how their lives will be affected. Everyone’s circumstances will be mostly likely be different, so this won’t be a case of one size fits all. Harbour an open conversation culture -it will help with more issues than this.
Flexibility is key
Could you offer flexible working or compressed hours so the cost of childcare or commuting can be reduced for those who’d benefit? Or could you tweak the start and finish times so that a later train with a cheaper fare can be caught? What about offering term-time- or job-sharing contracts. Think outside of the Monday to Friday, 9-5 box. Part time workers have lower instances of sickness and absence – may need some stats to support that – or offer working from home occasionally.
A flexible or hybrid working environment is usually now at the top of the jobseeker’s wish list and a key part of negotiations. People want a proper work-life balance, so are attracted to companies who offer flexible working arrangements from the get-go (and don’t renegade on the benefit).
Although remote working is very popular, there are workers who would still prefer to come into the office because it’s within walking distance from home and the free coffee is decent. By having a conversation with your employees, you can gauge what their priorities are and what works best for them.
Salary sacrifice schemes
Implementing salary sacrifice schemes is an innovative approach to supporting your employees. These programs allow your staff to exchange a portion of their salary for specific benefits or perks, such as pension contributions, childcare vouchers, or cycle-to-work schemes. Salary sacrifice not only aids your employees in saving money but also brings tax benefits for both them and the business.
Comprehensive employee benefits package
Enhance your benefits package to include financial support measures like debt counselling, financial education, and employee assistance programs. These resources can help your employees manage their finances more effectively and alleviate money worries, ultimately improving their mental health and physical wellbeing.
The power of reward
Incorporate a rewards system into your business structure to acknowledge the hard work of your employees. Recognising and rewarding their efforts can boost morale and motivation. Consider utilising platforms like Reward Gateway or Boostworks to manage and streamline your reward and recognition programmes.
Financial wellbeing workshops
Host financial wellbeing workshops for your staff to educate them on effective money management, budgeting, and savings. Collaborate with experts to provide tips and guidance on how to navigate the cost-of-living crisis successfully.
Maybe have a food share table – that sauce you bought that no one in your family likes – yellow sticker bargains – make it fun so it doesn’t alienate people.
Promote staff wellbeing
Promoting overall staff wellbeing, both physically and mentally, can significantly reduce the impact of financial stress on your employees. Encourage healthy living habits and provide resources for stress management and mental health support.
Managers and a duty of care
Consider training the managers in your organisation be the Mental Health Aware so they can spot the signs of anyone who may be struggling with their mental health. Do you nurture a caring and supportive environment where workers feel looked after?
Managers who recognise the difficulties and challenges faced by their team members will be better placed to offer support and guidance in line with company policies.
Get the payroll right
It’s vital that your payroll department has the right payroll software to make sure employees are paid accurately, and on time. This ensures that no unnecessary stress is caused by missing direct debits or not being able to buy food or fuel.
If you have a new starter, you could arrange for them to receive some salary in advance rather than having to wait 4-6 weeks for the first pay cheque.
Or here’s a radical idea to support employees with the rising costs of living
Although you can support employees with the rising costs of living in non-monetary ways, it’s a fact of life that money talks. If your staff need money to pay their bills and to live, how about increasing salaries and reducing profit for a couple of years? Or giving a one-off bonus to improve financial wellbeing? Pay your workers as much as you can afford and make sure that those at the bottom of the pay grade are looked after. Maybe investigate interest free loans or the good old pay advance in times of dire need.
While the national minimum wage £10.42 per hour is compulsory, the real living wage (£13.15 in London; £12.00 in the rest of the UK) is voluntary. The real living wage is independently calculated and based on what people need to get by. Companies that opt into the real living wage scheme give their employees a wage that meets their everyday needs.
If you’d like to have a confidential chat about how to support your employees with the rising costs of living, give Maxine a call on 01256 236007 or email firstname.lastname@example.org