Rising living costs and soaring inflation are concerning for all of us, and it’s no surprise that your employees might be feeling the pinch.
CIPD research has found that more employees are finding it hard to pay their bills, with only 48% managing without difficulties in winter 2023, down from 61% in winter 2022. They also found that financial struggles are bigger among women, lower-income earners, and those with disabilities. And there’s an increase in employees reporting that financial worries impact their job performance.
But there are ways employers can help with the cost of living and ease the financial stress many are feeling – and that’s not just through financial incentives that you might not be able to afford right now. There are ways businesses of any size can help employees navigate these challenging times, and we’ll show you how.
Financial wellbeing for employees is more than just about numbers on a paycheck. It’s about mental peace and stability. Research shows a direct correlation between financial wellbeing and mental health. Employees worried about finances are often stressed, leading to decreased productivity and engagement at work.
Before the pandemic, money worries were already causing stress for a lot of employees.
Rising living costs are now making the picture even worse, with a 2022 poll conducted for the World Economic Forum finding a quarter of people in 11 developed countries are struggling financially.
A business that supports its employees’ financial wellbeing sees increased loyalty and job satisfaction, as well as having a positive impact on productivity and engagement. Your approach to financial wellbeing for employees can be the major difference for your business, especially in a competitive recruitment market.
In these challenging times, smart strategies and initiatives can help you make things a little easier for your employees. For example:
Building partnerships with local businesses to get exclusive discounts and offers for your people is a win-win. This not only helps employees save money but also can boost your business’ reputation locally.
Offering flexible working options, such as working more from home or commuting at less busy times to save petrol, is a great way to reduce transportation costs for employees and show you value their time and wellbeing. Obviously this may not work for all businesses, but it will be a day-one right for employees to request flexible working from 6 April 2024. For more information on the benefits of flexible working, check out our article here. Or you can check out our handy blog on flexible working responsibilities.
Investing in health and wellbeing initiatives, like reduced gym membership costs and lunchtime wellbeing classes, not only gives employees a mental and physical boost but also shows them they are valued. Providing both on-site and off-site support for mental and physical services is crucial in these times – our Employee Assistance Programme (EAP) can give your employees 24/7 support with everything from financial stresses to mental health issues.
Employee benefit schemes can be anything from performance rewards to partnerships with banks for discounted mortgage rates. The right scheme can help employees stay on top of their finances.
Consider an agile approach to annual leave, allowing employees to convert unused holidays into a PAYE payment. This can provide a much-needed financial boost. However, remember that this can only be offered for holidays over and above the statutory legal minimum of 5.6 weeks.
Providing support and educational resources on topics like debt management and effective budgeting can be invaluable. Think about running a bitesize webinar for all your people, or partnering with a financial wellbeing service.
While increasing pay or offering bonuses seems like a direct approach, it’s essential to conduct a risk gap analysis to assess its impact on the business. Some businesses are adopting one-off cost-of-living payments to support employees during tough times, instead.
Addressing the cost of living crisis takes a bit of thought. You want to make sure any measures don’t seem tokenistic and end up having a negative impact on engagement, but you also don’t want to have a negative impact on the business. That’s why clear communication with your employees and really exploring all your options first is so important.
If you’d like support with things like employee engagement, HR policies, and people management, explore our all-in-one HR and employment law package, which can help you boost productivity and become 13x less likely to face an employment tribunal claim (vs. the national average). You should also check out our Employee Assistance Programme (EAP) if you’re looking to give your people professional support with their financial and mental health worries.
Remember, a well-supported employee is a happy and productive one. For HR support that won’t break the bank, simply fill in the form on this page and get in touch with us today.
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