The Cost-of-Living Crisis: What Employers Can Do To Help
According to the latest figures, British households are only halfway through a two-year cost-of-living crisis that has seen the average income fall by more than £2,000 in real terms. From the price of petrol to the cost of a loaf, soaring inflation has impacted almost every part of life, causing a nation-wide decline in mental health. Given this difficult economic climate, employers have a crucial role to play. Recent research indicated that financial insecurity is increasingly having a knock-on effect on performance at work, with 34% of people stating that money worries were impacting their sleep and mental health. Within all this in mind, we’re taking a look at seven ways employers can help during the cost-of-living crisis.
1. Pay a fair, living wage
Currently in the UK (as of January 2023), the national minimum wage for employees under 23 is £9.18, and the statutory ‘national living wage’ for employees over 23 is £9.50 - due to rise to £10.42 as of April 1stthis year. This are the minimum salaries that UK employers must pay by law. However, the ‘real’ living wage is estimated to be £10.90 across the UK, and £11.95 in London. Currently in the UK, 11,000 employers have committed to paying their teams the real living wage – an amount specifically calculated to meet the majority of people’s everyday needs, like the weekly shop or a surprise trip to the dentist. Aside from the fact that paying employees a salary that allows them to enjoy a decent and dignified life is the morally correct thing to do, it also has multiple business benefits such as boosting employee retention and business reputation.
2. Give above inflation pay rises or a one-off cost-of-living payment
Since inflation began to soar, around 5% of companies with 250 or more employees have offered one-off payments to support employees with rising costs. Some organisations have issued these in instalments, others a lump sum intended for specific purposes, such as paying a typical electricity bill for six months. Some companies have instead opted to give out pay rises which beat the cost-of-living increase, which for most UK employees works out at an additional 8%. This means the average UK full-time salary of £33k would need to rise to £35,640 to beat inflation.
3. Offer financial wellbeing education
According to recent figures, 39% of UK adults don’t feel confident managing their money, and 11.5 million of us have less than £100 in savings! Obviously, this can be a significant cause of anxiety and mental health issues for employees. Providing training and education on financial wellbeing on a voluntary basis can therefore be a useful move for organisations. For example, sessions may focus on household budgeting, the long-term importance of paying into a pension, and managing debt.
4. Consider employee benefits and discount schemes
Employee discount schemes not only help your team save money, but are also a great workplace perk to help attract new employees and keep your existing ones. Such schemes are especially effective if they offer discounts for products and services employees use frequently, such as supermarkets or popular high street retailers. Alternatively, organisations might consider offering benefits packages that include things like dental cover, private healthcare, or discounted gym memberships.
5. Provide free food or snacks
The latest figures from the ONS revealed that food and non-alcoholic drinks were the main contributor to rising prices, with the cost of bread, cereals, milk, cheese and eggs rising the fastest. Some employers are taking steps to alleviate the additional pressure this is placing on households. For example, UK retailers John Lewis and Waitrose recently made headlines by providing workers with free meals over the Christmas period. Alternatively, some businesses have chosen to take away the need for team members to buy their own snacks throughout the working week by offering free fruit or baked goods. Here at Gleeson, for example, we receive free fresh fruit deliveries every week!
6. Offer mental health support
A recent survey revealed that nine out of ten employees are concerned about how the cost-of-living crisis is impacting employees’ mental health, and for good reason – evidence suggests that nearly 13% of all sicknesses in the UK can be attributed to common conditions such as anxiety and depression. Mental health support can be offered through Employee Assistance Programmes (EAPs), which could include initiatives such as fast-track access to counselling services without a GP referral. Alongside this, it’s a good idea for organisations to work on creating an environment in which open and honest discussions about mental health are encouraged, and employees are reassured that they can approach HR to discuss any financial concerns confidentially.
7. Embrace flexibility
For some employees, the cost of commuting may be adding strain to their finances they could do without. For others, working from home and cranking up the heating may be pushing up costs, and for parents, the cost of childcare may also be causing additional pressure. Allowing employees to maintain flexibility over their working schedule can alleviate some of these concerns. For example, here at Gleeson most of our team members choose to work a hybrid schedule, and can complete their core hours any time between 7am-7pm. This allows employees to choose the working schedule that’s most cost-effective for them.
Ultimately, employers offering assistance during the cost-of-living crisis may be tricky at a time when businesses are also facing financial difficulties themselves. With organisations also seeing increases in rent and other bills, supporting employees whilst remaining profitable may prove a difficult balancing act. Although almost no businesses will be able to offer all of the initiatives outlined above, even one could make a huge difference - simply by demonstrating a commitment to help team members during difficult times, businesses are helping to create a culture in which such concerns are addressed out in the open and the stigma surrounding financial worries is reduced.
Looking to add to your team? You’re in the right place! We specialise in just about every industry and sector, from engineering and manufacturingand IT, to human resources, and marketing. Alternatively, you can leave us a messageand we’ll get back to you as soon as possible.