Almost all UK adults have noted a rise in cost of living this year, and it’s certainly not a small one. Consumer prices are up by more than 11% year on year, leaving many struggling to feed their families and pay their bills. In fact, 1 in 5 working age adults in the UK now lives in poverty, and it’s having a major impact on their ability to work.
77% believe that their financial worries are having a negative impact on their ability to do their job. And three quarters are seeking new roles to get a higher salary.
Unfortunately, businesses are feeling the strain, too. The number of businesses reported to be in financial distress has grown by 19% over the past year, leaving them in a position where they are unable to offer pay rises to their employees. 25% say they are unable to offer increases due to financial instability and uncertainty.
However, pay rises are not the only way to support employees at this difficult time. Here are some ways you can offer support even during this period of vulnerability:
- Introduce flexible working policies
If your staff currently work from the office, consider whether it’s feasible to implement a new flexible or hybrid policy that would enable staff to work from home for one or more days per week. The global health crisis showed that it can be done… and it can be done well. And it could make a huge difference to employees. With the Office for National Statistics reporting that 23% of adults are struggling to pay bills, reducing petrol, public transport, and other commuting costs could be a big help.
- Consider salary sacrifice schemes
A salary sacrifice scheme enables employees to exchange part of their pre-tax salary for a non-financial benefit. Childcare vouchers are perhaps the most well known option, but there are many other types of initiative out there. For example, some providers offer schemes for home working equipment, or for prepaid cards for certain stores. These typically have a negligible cost for businesses, but could make a notable difference for workers who can save money by paying less tax.
- Promote financial support services
The Office for National Statistics has found that 17% of adults are borrowing more money than they were last year. As an employer, you can offer support by ensuring that your staff know where to go should they need advice, and that they have access to the resources they need to manage their finances with confidence. You may wish to implement financial advisory tools as a form of employee benefit, or direct your staff to the Government’s Money and Pensions Service for guidance.
- Offer wellbeing support
The impact of financial worries extends far beyond the bank account. Worrying about money can have an effect on practically every aspect of life, health, and wellbeing. If you don’t already have an employee wellbeing strategy in place, now is the time to develop one. Consider launching a ‘buddy’ programme to ensure everyone has someone to talk to when things get tough. It’s also important to try and normalise financial discussion, rather than having it be somewhat ‘taboo’.
Supporting Employees When They Need it Most
Following a highly challenging two years of lockdowns and furlough, the cost of living crisis comes as yet another blow to businesses. But it’s not a problem that can be brushed under the rug. As more and more workers find themselves in financial distress, the ‘Great Resignation’ will only become worse, leaving organisations struggling to fill vacancies and maintain a happy and productive workforce.
Helping those experiencing difficulties isn’t just the right thing to do; it’s one of the best ways to protect your business and ensure you have the people you need. Times are tough. But supporting your employees is something you can’t afford to overlook.
