The cost-of-living crisis has been high on the news agenda, with inflation at the highest it’s been since records began and further price increases forecast for October.
There’s been pressure on the Government to bring in measures to help those people who are struggling the most but controversially, some ministers have pushed back and suggested the public should work more hours or ask for a pay rise as a solution to their financial challenges.
For many employers, simply offering companywide pay rises isn’t possible, especially after the challenges of the pandemic. Many businesses will also be incurring significantly higher running costs for materials, energy and higher wage expectations, making the situation a really complex one.
Not only are wages failing to keep pace with inflation, but we’re seeing their biggest fall since records began.[1] Some reports are predicting that one in three people are looking to leave their current role for a higher paid opportunity because they cannot afford to maintain their current lifestyle on their current pay.[2]
Whilst a company wide pay rise may not be feasible, here are some other ways employers can support their work force through these challenging times.
- Get the basics right – Ensuring your staff are paid fairly and on time are two basic principals that can make a big impact on how they feel and with their financial situation. While the national minimum wage is mandatory, the real living wage is voluntary and only applies to employees over the age of 18. Offering the real living wage is a way to help your staff get a fair pay and one which is closer to supporting their basic needs. It’s also crucial that businesses utilise an effective payroll system to ensure that employees are paid correctly and on time. This can have a big impact on people who have to budget carefully each month.
- Flexible working – Giving employees flexibility around where they work can benefit them financially. Some may choose to work remotely in order to save on commuting costs, others may favour working in the office to avoid paying additional electric and gas costs in their homes. By allowing flexibility, employees will feel empowered to make the best decision for their circumstances and not feel uncomfortable in doing so.
- Provide Financial Wellbeing Tools – Providing support for financial health and wellbeing, money management and mental health is more of a duty of care for employers. Not only will it help employees, but it will also benefit businesses. Unhappy, stressed and anxious employees aren’t going to perform to the best of their ability. Providing meaningful and effective support can be a lifeline for many people, prevent more serious issues in other instances and at the very least will ensure that employees feel valued.
- Offer Salary Sacrifice Schemes- Salary sacrifice schemes can be a great way for employees to benefit from some costly necessities whilst saving some tax on them. Allowing employees to exchange part of their salary for extra benefits such as childcare vouchers, a company car, a bicycle and additional pension contributions can be a helpful cost savings solution. These types of schemes are also beneficial to employers who are able to pay less employer national insurance contributions for each employee enrolled in the agreement. Speaking to employees and finding out what sort of things they’d find useful and most cost effective to form part of a salary sacrifice scheme is a good place to start.
- Money Saving Perks – Small but meaningful perks that can help your staff save money in other ways can also be a great way to boost morale and show you care. Offering free breakfasts a few days a week or subsidising gym membership can be helpful and also be an opportunity to promote health and wellbeing across the company. Employee perks really do help to create a positive culture but they need to be relevant and actually benefit your workforce so some thought needs to be given to what these might be based on the demographic of your staff.
Times are tough for a huge proportion of the population, and this is coupled with a challenging recruitment market as the demand for talent continues to hinder some sectors.
Thinking about how you can show your workforce you genuinely care will help to cultivate a positive working culture and a place where employees feel valued. Financial worries can put a huge strain on people’s mental health and so being able to offer practical support to help anyone in this situation can have a much more positive impact on wellbeing in the long run.
For more HR topical discussion, follow us on LinkedIn or Twitter.
[1] https://www.theguardian.com/commentisfree/2022/may/24/sunak-cost-of-living-crisis-business-green
[2] https://www.businessleader.co.uk/one-in-three-professionals-set-to-leave-their-jobs-amid-the-cost-of-living-crisis/