How you can help employees tackle the cost of living crisis
Soaring inflation. Sky-rocketing energy bills. Crippling food prices. Obscene fuel costs. Ridiculous mortgage rates. Rumoured recession. The future is looking financially bleak for many.
The cost of living crisis is impacting far beyond those on the lowest incomes, although they are undoubtedly hit the worst. As much as 77% of the UK population are worried about the rising cost of living. And while businesses hike up their prices to make up for their increased running costs, the majority of us are making tough decisions in regards to our spending. That’s because, despite salary growth figures looking strong, in real terms average pay has actually dropped by 3% - one of the largest falls in growth since ONS records began in 2001.
Whilst some may feel it is having a ‘positive’ impact on the labour market, such as 1 in 8 people taking second jobs, it’s actually having a much bigger detrimental effect. For example, 43% of women have considered leaving their job due to increasing childcare costs, which have risen to a whopping 65% of the average UK salary. Meanwhile, 71% of people are suffering moderate to high levels of stress, with 34% directly attributing this to increased financial pressures. The result is a loss in productivity, with 28% of people openly admitting to financial worries having a direct impact on their workplace. The most common symptoms caused by money worries are lost sleep, health problems, and finding it hard to concentrate or make decisions at work.
With business operating costs spiralling just as dramatically as personal ones, organisations can ill-afford such significant drops in productivity. Poor financial wellbeing costs employers up to 17% of salary costs (source: fincap.org.uk). That’s why We Are Adam have pulled together the best ways that you can support employees through the current crisis. Employee wellbeing has gone beyond a ‘nice to have’; it’s business critical.
I have no budget. What can I do?
The easiest way to start supporting employees through this cost of living crisis also happens to be free. It’s important to normalise financial conversations in the workplace to help reduce stigma. It’s all well and good putting new schemes and benefits in place, but if people are too afraid to access them, it becomes a waste of business resources.
Ways you can normalise financial conversations without allowing employees to discuss confidential topics like salary are:
- Signposting to free advice
- Creating a pool of resources such as budgeting tools
- Provide in-house workshops with a financial advisor
Another key way to support employees financial wellbeing is embracing flexibility. Most businesses now offer flexible working of some kind, but the key here is to allow people to work in ways that will help them either save money or reduce outgoings. That doesn’t always mean having set office or WFH days. One idea is to allow employees to adjust their working hours to avoid peak fares on public transport. Or why not keep your office open everyday and allow those who need to the opportunity to save on their energy bills at home by working full time at your location instead?
Does your existing benefits package come with corporate discounts? Many benefits providers also tag on schemes such as Perks At Work, giving employees access to preferential rates thanks to their buying power. These schemes are typically free add-ons and well worth reminding your employees about regularly.
You could also sign up for salary sacrifice schemes such as Cycle2Work, Techscheme or provide season ticket loans for public transport or parking facilities. A more radical idea is to offer loan consolidation to help employees who are struggling to pay off multiple debts. Whilst there is an initial financial outlay for the business, the costs are recuperated through payroll – meaning no budget is required to administer these schemes.
If you have a Cycle2Work (or similar) scheme already in place, do you provide showers and bike storage? Most rented office spaces have these facilities built in, so chances are you’re already paying for it in your service charge, but do your employees know about them? There’s a three-fold advantage to offering something as simple as shower facilities. One, you encourage healthy habits. Two, you reduce the company’s carbon footprint. Three, and most importantly for this blog, if employees shower at work it can reduce their energy bills at home.
Sometimes providing support can be as simple as suggesting an idea and letting the team run with it. For example, facilitating a car share scheme can help employees who are struggling with rising fuel prices whilst simultaneously reducing your company’s carbon footprint.
Some simple, practical help for your team can be to make sure all processes are clearly communicated. Being consistent with payroll – same day each week/month – can provide much needed stability. You might also find, for example, that employees neglect to put through their expenses properly. This means they’re missing out on reimbursement that they’re contractually entitled to, simply because they don’t understand the system or forget when the deadline is.
Could you pay someone early if needed? SME’s in particular can offer a lot of agility around payday, and could advance an employee some or all of their salary should an unforeseen emergency occur. If you don’t have that agility at present, but have a bit of a budget, why not look at income streaming services? These tools allow employees to access the wages they have already earned ahead of payday.
Another completely free way to support employees during the cost of living crisis is to provide opportunities for internal progression. Whilst it’s not always possible to promote from within, it can significantly boost morale, engagement and retention when the team sees their colleague being recognised for their excellence.
Finally, the most important step in supporting your employees through the crisis can also be free. Training your managers to take the right approach with struggling team members is vital. Has the employee been charging personal devices such as their mobile phone or tablet at work? Managers should be able to recognise this as a cost-saving exercise and encourage the employee to seek out additional assistance, knowing where to direct them for their specific challenges.
I can spend some money. What ideas do you have?
A PwC survey recently showed that amongst large businesses, 53% have increased essential workers’ pay, 51% have introduced additional pay reviews and 40% have given one off bonuses. With 83% of reward specialists considering ways to help employees, you’re certainly not alone in taking action.
First off, make sure you pay a fair, competitive wage for all roles. If you’re confident that the salaries you offer are consistent and in line with market rates then you could ask:
- Can you bring forward annual pay reviews or introduce them half-yearly?
- When did you last implement a blanket pay increase?
- Can you increase salaries in line with inflation?
Why not consider a smaller rise with additional short term financial benefits. Your employees get to see the impact short term, but you aren’t stuck with a high wage bill if costs start to fall again. One such short term benefit could be to provide crisis loans to help with unexpected expenses, but you can get creative here.
Some businesses have automatically paid out a wellbeing grant or similar, as a one-off payment to all employees regardless of perceived need. Other ideas could include purchasing gift vouchers for supermarkets to help with food shopping, or vouchers for leisure activities. These have the added bonus of supporting both physical and mental wellbeing, whilst simultaneously enabling an employee to get out of the house and do something they enjoy, but maybe can’t afford right now.
In a similar vein, your business could arrange regular social events. These should be as inclusive as possible, but could include:
- Meals out
- After work drinks
- Theatre tickets
- Bowling
- Cookery classes… the possibilities are pretty endless. Ask your team what they would like to do!
If you’d rather keep it within work hours, why not provide a free lunch or allowance with a delivery service like Deliveroo? Of course, if your business premises has a canteen, you could easily subsidise meals to provide a subtle but significant reduction in employees’ food bills.
Do you have an Employee Assistance Program in place? If not, get one! If you do, is it easily accessed and well communicated? Lots of businesses are taking this type of support a step further by training volunteer employees as Mental Health First Aiders. It’s an important investment into the wider wellbeing of your workforce and will undoubtedly provide ROI thanks to increased productivity.
Managing annual leave can be a minefield. On the one hand, you probably offer a generous allowance to improve talent attraction and increase retention. But you also are likely to have a portion of your workforce who have leave days left come December. Rather than these employees losing their untaken entitlement, you could introduce a policy which allows them to sell back unused holidays. Of course, this must be subject to them taking the minimum statutory requirement, so make sure the policy is planned carefully before you implement such a change.
A more traditional way to offer additional financial support in addition to increasing salary is to offer a company car. Just remember to make sure this is an inclusive benefit by giving an allowance or season ticket loan as an alternative for those who do not drive.
I need examples for the board. Who is doing it well?
Barclays – have brought forward their annual pay review and more than 35,000 staff will receive a £1,200 pay rise.
Co-Operative Bank – having already made a one-off cash payment to lower salaried staff earlier in the year, they have now announced that around 95% of employees will be eligible for an additional £1,000 pay rise.
Hastings Direct – staff earning up to £45,000 will be the recipients of an immediate 5% pay rise, accompanied by an additional £500 bonus. Non-eligible employees will instead have their pay review brought forward.
Hays Travel – are trialling a monthly prize where an employee is chosen at random. Current prizes have included a £5,000 cruise, a new car and having energy bills paid for 6 months.
John Lewis – are increasing their entry level pay by 4% and giving a one-off payment of £500, costing around £45 million.
Klarna UK - staff get £50 UberEats credit per week. This can be used for lunches, or even a weekly food shop using Morrisons and other supermarkets with a presence on delivery apps.
Moneysupermarket – a substantial one-off payment of £2,000 to employees earning £55,000 or below.
Rolls Royce – are also paying an extra £2,000 to more than 14,000 workers, whilst simultaneously awarding a backdated pay rise of 4% to 11,000 staff.
West Brom Building Society – are giving 430 employees a one-off payment of £1,200 in addition to their ability to access a Financial Hardship Support Fund and a 5% performance-related bonus.
Yorkshire Building Society – are also making a one-off payment of £1,200.This is in addition to the £1,000 payment made earlier in the year and on top of an average pay rise of 10.6%. Superb stuff!
I need a list of resources. Where should I start?
If you’re unsure about how to get started with some of the ideas suggested in this blog, why not visit the following websites?
A free budgeting tool from MoneyHelper
A government run resource centre to help people identify what support is out there
Advice from GOV.UK on claiming tax relief for your employees
The Blue Light Card Scheme is a discount card for eligible key workers
Guidance for businesses on being a real living wage employer
What are you doing to help your employees through the current Financial Crisis? Have you had a brilliant idea that we haven't touched on here? Reach out to us on Socials or email us, and we'll feature you in this blog!
