A recent poll conducted by the CIPD found financial insecurity is having a knock-on effect on performance at work. More than a quarter of respondents said money problems were affecting their job performance and a fifth found money worries affected their sleep. When you combine the lasting impact of the pandemic, a turbulent economy and rising costs for businesses, few employers are in a position to offer their employees a true ‘cost of living’ pay increase. And whilst wages have risen in recent months, in many cases they’ve failed to keep pace with the current rate of inflation.
So, keep reading to find out how can you support employees with the cost-of-living crisis and help them make their wages go further.
Pay a fair and liveable wage
The real Living Wage, set by the Living Wage Foundation, is independently calculated based on the minimum a worker needs to earn to cover the basic costs of living. Paid by nearly 10,000 UK employers, it’s currently £9.90 an hour across the UK and £11.05 in London. By point of comparison, the minimum wage is £9.18, and the national living wage is £9.50.
If your business is able to pay the real Living Wage, there’s multiple business benefits. These include improving the reputation of your business, boosting employee retention and it of course helps employee relations.
Implement a financial wellbeing policy and provide financial education
You can demonstrate your commitment to supporting your employees’ financial wellbeing through implementing a financial wellbeing policy that feeds into your wider wellbeing strategy. It can be as simple as committing to signpost your employees to independent money and debt guidance, making sure your staff are aware of all the benefits you currently offer and normalising conversations about money worries at work.
The Money Advice Service has reported that 39% of adults in the UK don’t feel confident managing their money and 11.5 million have less than £100 in savings.
Letting your workforce know where they can access free, confidential and independent money advice could help some of them make savings and better long-term decisions.
There isn’t a one-size fits all solution here, either on an organisational or individual level, and some workers who might benefit could be reluctant to join a workshop type format. Remember, personal financial advice is a regulated activity. However, your finance team or an outside professional may be able to put together a general session and provide written information on cash and debt management, including how to find help for those in difficulty.
Consider employee benefits and discounts schemes
Through signing up with a benefits and discounts provider, you can give your employees access to desirable perks and help them make considerable financial savings. A comprehensive benefits package is not only cost effective for employers but in a competitive labour market, it can help you to stand out as an employer of choice.
A benefits package can include things like:
Eye care vouchers
Occupational sick pay
Free flu vaccinations
Employee Assistance Programme
Thousands of discounts are also on offer including:
20% off and 2 for 1 offers
Loaded gift cards and cashback for popular retailers and services
Introduce a salary sacrifice scheme
Salary sacrifice schemes are a great low-cost way to financially help employees. Under the scheme, employees can swap some of their ‘cash’ pay for tax free benefits in kind. Typically used to maximise pension contributions, it’s also available for childcare costs, bicycles and a host of others.
Offer a one-off bonus or voucher
Those employers who are unable to commit to an on-going pay increase could offer a one-off bonus in either cash or vouchers. This will not only help your employees financially but also show them that they’re valued. Vouchers that can be used towards the weekly shopping bill and can really help salaries stretch a little further.
Consider offering discounts on your own products
Are you able to offer discounts on any of your goods or services? If you currently offer staff discount, you could consider extending the offer to family and friends. Any discount, no matter how small, may go a long way to help your employees during this challenging time.
Support in-work progression
In 2020, the Department for Work and Pensions set up the In-Work Progression Commission, which outlines the steps employers can take to develop their workforce’s skills and help combat in-work poverty. This involves giving employees a clear path to follow, access to the right training and a supportive line manager.
Increase your focus on mental health
The worry of increased bills is likely to have a detrimental impact on mental health issues for many. Have a plan for dealing with potential issues and offer training so managers understand how to spot signs of depression or anxiety. Consider offering services such as counselling and therapy so employees can access help quickly if needed.
You could also consider having 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. Whilst a medical first aider helps take care of someone who is injured at work alongside their usual duties, a mental health first aider will be an employee’s first point of communication for any mental health related concern.
Another option is giving your employees access to an Employee Assistance Programme (EAP). An EAP is a completely confidential service that helps employees, and their families deal with issues both negative and positive in their home or work life, that might impact their work performance, health and wellbeing. They often give employees access to a confidential telephone helpline that’s available 24/7/365.
Finally, socialising can be expensive and one of the first things to give up when budgets are tight. Consider organising a social event, perhaps even using your workplace if that’s appropriate and safe to give people a cost-effective way to mingle out of work time.
Embrace flexible working
Flexible working includes working remotely, working part-time, annualised or compressed hours, flexitime and job sharing.
Embracing flexible working can improve career progression options and consequently enable employees to increase their earning power. It can also reduce travel costs by working from home for example, reduce the amount spent on childcare fees and ultimately reduce the stress of balancing work and home life.
Provide bike storage and charging points for electric cars
Many people are looking at ways to cut down on their fuel costs. Providing secure spaces for bikes, scooters and charging ports for electric cars would enable your employees to reduce the amount they spend on fuel.
Balance is key
We recognise employers are in a very tricky situation where they’re trying to help employees who are struggling and facing financial difficulties whilst their business is also facing price hikes. It’s important to emphasise that balance is absolutely key to this, and I hope you’ve found this blog insightful.
To find out more about how you can help your employees make their wages go further, listen to our recent webinar on the cost of living crisis. Hosted by Michelle Hobson, our HR Services Director, it covers how the cost-of-living crisis is affecting individuals across the UK, combatting in-work poverty, the importance of a financial wellbeing policy, supporting employees who are suffering from financial anxiety and the business benefits of supporting employees.