How can employers help relieve the strain of the cost of living crisis?
The Cost-of-Living Crisis: What Employers Can Do To Help
British households are just halfway through a two-year cost-of-living crisis that has seen the average income decline by more than £2,000 in real terms, according to the most recent data. Rising inflation has had an effect on practically every aspect of life, from the cost of gas to the price of a loaf of bread, leading to a drop in mental health across the country. Employers have a critical role in this challenging economic environment. According to recent research, 34% of participants said that worrying about money was affecting their sleep and mental health, which in turn was having an influence on their performance at work. We’re looking at seven ways businesses might assist amid the cost-of-living issue with all of this in mind.
1. Pay a fair, living wage
The national minimum wage in the UK is currently £9.18 (as of January 2023), and the compulsory “national living wage” for workers over 23 is currently £9.50 (it will increase to £10.42 on April 1 this year). These are the legal minimum salaries that UK employers are required to offer. The “actual” living wage, however, is thought to be £10.90 in the entire UK and £11.95 in London. Currently, 11,000 UK firms have pledged to paying their staff the actual living wage, which is an amount determined to cover most people’s basic requirements, such as the weekly grocery buy or an unanticipated trip to the dentist. In addition to being the morally correct thing to do, paying employees a salary that enables them to live a respectable and dignified life has numerous positive implications on the company’s reputation and employee retention.
2. Give above-inflation pay rises or a one-off cost-of-living payment
About 5% of businesses with 250 or more employees have made one-time payments to help employees with increased costs since inflation started to surge. For specific objectives, like covering a normal electricity payment for six months, some organisations have provided these in installments, while others have done it as a flat sum. Instead, some businesses have chosen to offer pay increases that are higher than the cost-of-living increase, which for the majority of UK employees amounts to an additional 8%. In order to keep up with inflation, the typical full-time salary in the UK would have to increase to £35,640.
3. Offer financial well-being education
Recent statistics show that 39% of UK people lack confidence in managing their finances, and 11.5 million of us have savings totaling less than £100! Undoubtedly, this can significantly contribute to employees’ uneasiness and mental health problems. Therefore, organisations may find it beneficial to offer free financial well-being training and instruction. Sessions might cover topics including managing debt, contributing to a pension over time, and home budgeting.
4. Consider employee benefits and discount schemes
Employee discount programs are a terrific way for your team to save money while also attracting new hires and retaining existing ones. Such programs are particularly successful if they provide discounts for goods and services that employees frequently use, such as supermarkets or well-known high street stores. As an alternative, businesses can think about providing benefit packages including items like dental insurance, private healthcare, or reduced gym memberships.
5. Provide free food or snacks
According to the most recent ONS data, food and non-alcoholic beverages were the biggest cause of price increases, with bread, cereals, milk, cheese, and eggs experiencing the greatest increases. Some firms are making efforts to lessen the added stress this is putting on families. For instance, UK stores John Lewis and Waitrose made news lately by giving employees free dinners throughout the Christmas season. As an alternative, some companies give complimentary fruit or baked products to eliminate the need for team members to purchase their own snacks throughout the workweek. For instance, every week we get complimentary supplies of fresh fruit here at Gleeson!
6. Offer mental health support
According to a recent survey, nine out of ten workers are worried about how the cost-of-living crisis is affecting workers’ mental health. This is understandable given that the UK’s total number of illnesses is estimated to be around 13%, with common illnesses like anxiety and depression accounting for a significant portion of those illnesses. Employee assistance programmes (EAPs), which may offer initiatives like fast-track access to counselling sessions without a GP referral, can provide mental health help. Along with this, it’s a good idea for businesses to focus on developing a culture where candid conversations about mental health are welcomed and where staff members feel confident approaching HR for a confidential discussion of any financial worries.
7. Embrace flexibility
For some workers, the expense of commuting may be placing an unnecessary strain on their budget. Others may find that working from home and turning up the heat increase expenditures, and for parents, the cost of childcare may also be adding to the strain. Some of these worries can be reduced by allowing employees to keep flexibility over their work schedule. For instance, most of our team members at Gleeson opt to work a hybrid schedule, which allows them to finish their core hours whenever they like between the hours of 7am and 7pm. Employees are able to select the working arrangement that is most affordable for them thanks to this.
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.
