Cost of living rises – empower your managers to support your employees

The UK is currently facing the biggest decline in household income since the 1970s, exacerbated by a record increase in household energy bills, inflation at the highest rate for 30 years and almost everything having become more expensive; it would be hard to find anyone who isn’t feeling the pinch right now.

Financially unsettling times go hand in hand with mental health. As an employer, and in most cases, the main source of income to your employees, you have a duty of care to recognise the impact the current crisis may be having on your employees’ wellbeing and ensure you’re offering appropriate support.

Mental wellbeing is not the only impact that employers need to consider. With “The Great Resignation” creating a more competitive job market than in recent memory, giving employees more negotiating power than ever, businesses are facing recruitment and retention challenges that impact pay and reward decisions.

Taking both of these into consideration, employers need to have more open pay conversations. Unlike BT and Tesco, which recently announced widescale pay increases, many organisations won’t be in a position to offer company-wide pay rises in line with inflation, so will need  to consider other ways in which they can ensure employees feel valued and supported in these increasingly difficult times.

A one-time ‘cost of living’ bonus

A less costly alternative to committing to pay increases is considering paying employees a one-time bonus to help curb the impact of the cost of living rises. Unlike ‘regular’ bonuses that are usually tied to performance or on a yearly pay schedule, these bonuses are designed to give employees a much-needed cash injection to support with the rising costs. Irwin Mitchell is one of the latest companies to have done this, paying most colleagues a one-off payment of £900 in April’s salary.

If this is something you can afford to do, make sure you’re clear, in writing, why the bonus is being paid, what period it covers and that it is a discretionary one-off payment, or you could give the impression that this is a contractual entitlement and set expectations for it to happen every year.

If one-off bonuses are not an option for your business, you can help your employees in a number of other ways.

Continue being flexible

You may consider continuing with the flexibility that was afforded to employees during the pandemic – whether that’s continuing to work from home to save on travel costs, or coming into the office to save on utilities. Being flexible in your approach and understanding everyone’s circumstances are different is another way you can support your workforce. If you are implementing a hybrid working policy, we can help you with our HR Policy and document services.

Financial Education

Some organisations are investing in financial education for their employees to set them up in the best way to manage their money, as the old proverb goes, “teach a man to fish…”.

There are varying degrees of support that a company can offer, from clearly signposting your employees to support tools, such as budget planners, calculators to help with financial decisions, helplines and charities such as StepChange or, putting on financial wellbeing workshops like holding a group session with a financial adviser.

Alternatively, adding funding for courses as an employee benefit in areas such as budgeting or debt management could be really helpful to some of your employees.

Amplify your existing benefits

If you already have a benefit platform in place, you may want to send out a communication reminding your employees of some of the discounts they can take advantage of. Many benefit platforms are offering vouchers, discounts or cash back on the high street and at supermarkets, which can help take the pressure off the cost of the weekly food shop. There are also government schemes like  cycle to work, which might appeal to people paying increased costs for fuel and the tax-free childcare, where the government pays 20% of childcare costs up to a maximum of £2000 each year.

Transparency

Conversations about money can be difficult.  Financial worries are often a taboo subject, but having an open-door policy so your employees feel able to discuss any difficulties they’re facing will allow you to point them in the right direction for help and support, whether it’s financial assistance or support for their mental health.

We help empower managers in every aspect of employee relationship management and simplify the process for having fair and consistent conversations like these. Our suite of solutions help to enhance manager capability, using technology to deliver intuitive and interactive guided journeys, giving access to ER experts that coach managers to the right decision and developing leadership skills with specialist manager training, including how to be confident in managing mental health issues.