Supporting employees through the cost of living crisis
As the cost of living continuing to soar, people everywhere are really feeling the pinch financially. Escalating bills for energy, fuel, transport, and food have recently reached their highest price in over 13 years.
For employers to support employees through these difficult times, the obvious solution to ease financial worries would be to offer pay rises in line with, or above, inflation – but, for most employers this is neither possible nor feasible as many are still trying to find their feet again as we emerge from a global pandemic.
So, what else can employers do to support their employees through this rise in the cost of living? We’ve listed some suggestions that organisations could consider to help ease this burden, which in return would go some way to support their general wellbeing.
1. Offer financial wellbeing support
In addition to the usual wellbeing support many organisations provide, it may well be worth reviewing the offer of financial education to your employees. This could be done in a number of cost-effective ways including seminars, webinars or some form of financial guidance on a one-to-one basis. Providing financial education could equip employees with life-changing skills which could be of more benefit than a salary increase in the long run. You may also want to promote any Employee Assistance Programmes (EAP) that you have in place and highlight that your employees can get support in a wider variety of areas such as mortgage advice, financial planning, and debt management in addition to the many other unrelated issues. It is important that whatever support and wellbeing initiatives you do have in place are well communicated, making it really clear to your employees what they are and how they can be accessed.
2. Prevention is better than cure
Encourage a culture of openness surrounding money and try and deal with issues before they become overwhelming and too much of a problem. Whilst people can’t always control how much money they have, they can control how their money is used. Regular one-to-ones between managers and employees may encourage them to feel more comfortable in raising financial concerns that could impact their performance. To ensure these sessions are effective, consider how well your managers are equipped to have those helpful and impactful conversations, and that they know where to signpost their team to.
3. Encourage sensible pension choices
During times of financial difficulty, many people slash costs that they deem non-essential. Some, particularly younger employees who see retirement as a distant issue, may be tempted to reduce pension contributions or pull out of company pension schemes altogether. Employers should ensure they communicate the long-term financial risks this can create.
4. Allow flexible and remote working
Remote working, even one day a week, could make a significant difference to a person’s financial situation, saving on the cost of fuel or public transport. Removing the need to commute entirely could mean that employees are able to potentially relocate to an area with a lower cost of living. Remote workers would also benefit from other forms of cost saving including food, clothing, childcare and pet care.
5. Help mitigate transport costs
Does your company offer a cycle to work scheme? Those employees who live close enough to their workplace to cycle rather than drive could save on fuel costs. Workers taking this option would also gain financially, as cycle-to-work schemes operate as a salary sacrifice employee benefit, with the cost of the bike taken off their gross salary resulting in paying less income tax and National Insurance. This may offset some of the NI rise that has kicked in.
6. Offer a one-off cash payment
Providing you have the budget available you could consider offering employees an amount of cash to cover certain costs, such as the energy required to work from home. Some employers have gone as far as offering up to £700 to cover the rise in energy expenses with bills expected to jump by an average of 54% or £693 a year from April.
If you are considering this as a potential option, you would need to consider whether it is a one-off discretionary gift or as part of monthly wages, taking into consideration the tax and pension implications for both the employee and the organisation.
7. Introduce a Rewards Programme
Starting a monthly rewards programme that offers incentives for good performance can help employees financially and is also a great way to motivate teams.
8. Start a breakfast club
Small savings could make a huge difference to people’s pockets. Offering a breakfast club not only fosters team bonding but allows people to save money on one meal a day. The same would apply for free snacks, fruit and hot drinks, as well as subsidised lunches.
9. Invest in an employee discount scheme and a benevolent fund
If you already have one, promote it. This is about ensuring staff are aware of the discounts and support available to them, and how they can access resources and information to better manage their day-to-day finances. Discounts on consumer goods and supermarkets, for example, could make a significant difference and providing examples of how much employees have been able to save using the benefits which may already be available to them, could increase uptake and help more people.
10. Ask for feedback, suggestions and ideas
Ask your employees how best you can support them through the crisis i.e., what benefits would they like to see? It would need to be recognised of course, there isn’t an endless pot of money to help, but ask them about any creative ideas they may have. Are there any small steps your business can take that will help ease the burden that haven’t already been considered? Are there any benefits that could be traded with something that would be more impactful and useful at this present time? This approach of open discussion and recognition of what everyone is dealing with will also encourage engagement with your teams. It also demonstrates that, as an employer, you recognise the financial challenges your employees may be facing and the subsequent impact this may have on their mental wellbeing and performance. It also demonstrates that you want to help them in the best way you can within the financial constraints on your business.
Don’t forget, if you have any particular employee relations challenges, we can help. Get in touch for an informal chat about your requirements: email@example.com