The cost-of-living crisis: Five ways you can support your employees
Employers shouldn’t leave their people to cope with rising prices on their own – here’s how you can help to ease the strain.
It’s no secret that prices are rising faster than they have in a generation. Inflation is heading rapidly for double figures, energy bills have doubled in 12 months, and millions of employees are feeling the squeeze. According to a survey by the Post Office and The Trussell Trust, 38% of Brits had to choose between heating or eating in the three months from November to January.
At the same time, employers are facing a slowing economy and the prospect of recession – financial reality dictates that simply offering more pay is not an option for many. Research by the Chartered Management Institute in April found that almost half of UK organisations (48%) were not planning to offer any pay rise at all this year, due to fears over their future financial performance. Of those that were, the average uplift was 2.8%, a long way short of keeping up with prices.
Does that mean employers should simply leave their people to face the challenge alone? No, says Francis Goss, director, people experience consulting at Gallagher: “Employers are in a unique position to support their employees through financial difficulties. In doing so, they are discharging their social responsibility as an employer, as well as delivering better business outcomes for all. When employees are worried about how they are going to pay their bills or put fuel in their car, it’s not surprising that the financial stress can have a negative impact on their work, so anything that employers can do, even with limited budgets is welcomed.”
Fortunately, there are a range of practical and cost-effective ways in which organisations can help employees cope with the cost of living crisis, and support both their people and the future of their business.
Access to external debt support and advice
The best solution for debt support is to have an Employee Assistance Plan in place, but in the absence of one, there are a number of reputable, free-to-use debt management support services that provide advice, liaise with creditors and help employees avoid the long-term stress of unmanageable financial commitments. Signposting sources such as StepChange, National Debtline and CAP on your intranet and via regular internal communication can be very effective.
Streamline your existing offer
What benefits do you already provide that help employees save money? And how easy are they to use? Many firms offer discounts with retailers and supermarkets, for example, but if they are only available through a complicated registration and sign-in process then take-up will be less than it could be. The same applies to discounts on home, car and pet insurance, all great ways to save money in hard times. It’s also worth looking at any benefits that are consistently less popular and replacing them with more relevant and compelling alternatives. Whatever you do offer, make sure that money-saving benefits are as quick and easy for employees to access as possible.
Look at the latest innovations
It’s always worth checking out the employee benefits market, especially if you haven’t reviewed what new innovations are available. Here are a couple of examples:
Prepaid cashback cards. Like the bYond card, a new prepaid debit card that offers up to 15% cashback to a maximum of £900 a year and is accepted by a wide range of popular retailers. It also comes with an app to help users track their spending and top the card up from their bank accounts.
Sidecar savings schemes. Also known as emergency savings. These help employees save for a rainy day – or an unexpected bill such as a broken-down car or washing machine – and are an innovative use of the same self-enrolment principle that is familiar from pension schemes. Members contribute an additional sum direct from payroll that goes into a savings pot they can access in an emergency, building short-term financial resilience and encouraging a habit of saving. Research by provider Nest has found that eight out of ten employees struggling with bills believe a sidecar scheme would help them.
Ensure your expenses policy is keeping up
When did you last update your car mileage allowance to reflect current fuel costs? And what about homeworkers – do you encourage them to maximise the tax benefits of working from home? Do you provide an allowance to help them cope with the cost of heating their home offices in winter?
Spread the word
You may have amazing benefits in place that can save your employees hundreds of pounds a year, but if they don’t know what’s available to them then your hard work has all been in vain. The rule of thumb when it comes to messaging is that however much you are doing it, it’s probably not enough. Make it more engaging by describing it as saving money rather than employee benefits – initiatives such as holding a Money Saving Week or a Cost of Living roadshow can drive the benefits message home to employees in a more relevant way.
Coping with the cost-of-living crisis is going to be a major challenge for many of your people over the next year or two. “Having the right benefits in place, and making sure you communicate effectively about them, can really help your employees cope with the cost-of-living crisis and keep them engaged and productive at work,” says Goss. “It’s doing the right thing for the business and the right thing for your people too.”
This article was culled from the People Management Insight Magazine of the CIPD. UK
