The cost-of-living crisis is bringing a whole new set of challenges for people across the country. And it’s having a catastrophic effect on both the financial and personal wellbeing for those affected. The cost of living is spiralling out of control, to such an extent that when winter is upon us, people really will have to choose between heating or eating.
This is going to have a potentially severe impact on employers. Some of which have already been facing huge challenges in retaining and engaging people. It’s no secret that a full workforce of highly engaged people is critical to business success. Yet, with around 1.3 million job vacancies, many companies are understaffed, and morale is low.
The impact of financial insecurity is creating pressure on employers to match inflation with high pay rises. But this isn’t sustainable in most cases. This then this leaves companies in a perilous position of risking losing their people. Another problem being that this may result in employees being completely stressed out.
However, all is not lost. Employers can come through this by being proactive in how they adapt to this situation and support their people. Employers need to express concern and care for their people, express concern for their financial security, and care for their physical and mental wellbeing.
How can employees be supported?
If you are familiar with Maslow’s hierarchy of needs, you’ll know that at the very base of the pyramid are basic needs. And it is these areas that are being threatened by the cost-of-living crisis.
Companies now need to adapt and focus their efforts on the two lower parts of the pyramid to help people fulfil their basic needs (physiological and safety needs).
What are my options?
The cost-of-living crisis is likely to be affecting many of your employees. And because of this, you may have noticed a decrease in productivity. But for many organisations, salary increases to support staff members through these tough times aren’t always a viable option. And in fact, recent research has found that only 5% of employees think their employer is doing enough to help them through the cost-of-living crisis. So, what else can be done?
Review your financial wellbeing policy and promote it
It’s been found that money worries affect one in four employees, affecting their ability to perform well in their job. Demonstrating commitment to supporting employee financial wellbeing can therefore make a valuable difference.
Take a look at your financial wellbeing policy and assess whether you are paying a fair and liveable wage, what your benefits packages include and if you can enhance this, if you offer financial courses/education, and if you offer internal progression. Then ask yourself these questions: Do staff know what help is on offer? Do they know how they can get it?
Train managers correctly
Ensure that your managers can provide the right support to staff through the cost-of-living crisis. By using different development exercises, managers will be able to adopt an approach that supports employee health and wellbeing.
Create the right environment
Create an environment where you can establish trust. This will enable individuals to have the confidence to discuss their own challenges with the rising costs. Empower them to speak up, that you recognise this, and that you understand them.
Discount schemes
Consider an employee discount scheme to help staff money go further. It’s especially effective when the discounts on offer are also for products or services that employees regularly purchase. For example, you could look into retailer discounts, eating out and days out, technology, or gym memberships.
Terryberry – a leading reward and recognition specialist – worked with the UK government to launch the ‘Help for Employees’ scheme. At a cost of just £5 per person, per year to the organisation, employees can then save up to £3,000 a year on everyday shopping.
Season ticket loan
A season ticket loan is an interest free loan for employers to cover the cost of travelling to and from the workplace. This covers modes of transport like trains, trams, and buses. It enables employees to take advantage of the cheaper, annual fee (instead of paying monthly, which works out to be the more expensive option), but to still spread out the cost.
Communicate external support services
Many financial support services are available online that you can make employees aware of. For example, MoneyHelper (a budget planner) and Citizens Advice (helps people to learn which benefits or grants they may be eligible for). If some employees are struggling with debt, there’s also charities such as Turn2us and National Debtline, who can help with severe debt issues.
This article contains a snippet from our 2022 report on The State of Employee Engagement. This report draws on insights from our 400+ clients at WorkBuzz and research conducted with 300+ people and business leaders. It outlines their top priorities, best practices, and different perspectives to help you navigate an ever-changing world of work. Download the full version of the report below.