Claire Weal looks at what businesses can do to alleviate the pain of the cost of living crisis for employees. This article was first published in People Management on 1 August.
Rising costs are becoming increasingly dire for many up and down the country. Inflation is at its highest rate in 40 years. Utility bills and food and fuel prices are rising and there are reports of many workers now living in poverty. Given this difficult economic environment, many employers are looking at what they can do to help with the rising cost of living.
It wouldn’t be surprising if the answer from staff was ‘a pay rise please’, but, with many organisations feeling the impact of these issues too, an increase to the wages bill is not always going to be an option.
Financial measures to help with the cost of living crisis
- For some, one-off payments or tax-free vouchers to assist with rising bills and food prices may be an alternative to fully fledged pay rises, as may proactive measures such as providing subsidised meals at work or facilitating car-share arrangements.
- Staff could be allowed to sell back unused holiday entitlement (subject to the minimum 5.6 weeks’ paid annual leave, which cannot be paid in lieu).
- Loans for public transport or salary sacrifice schemes can also be used to efficiently assist with things like childcare vouchers or cycle to work programmes, while sharing the burden between employee and employer.
Other than cold, hard cash, compassion and understanding can and will go a long way – and different employees will have different needs, impacting what they want from their employer. For instance, depending on whether an employee is more concerned by the cost of travel or the costs of utilities, they may wish to choose where they work to suit their financial situation. Many employers can give this flexibility, especially businesses that have proved the effectiveness of remote working over the pandemic.
Part of gaining the understanding of each employee’s unique situation is communication, and offering robust advice and help wherever possible. This can be achieved with an employee assistance programme – one that provides financial advice as well as assistance for people experiencing stress as a result of financial pressures.
It is also important for employers to understand that employees with certain protected characteristics may be more affected by the cost-of-living crisis than others. Younger people tend to be on lower wages than older employees, and women are still more likely to be paid less than men. In addition, many people with disabilities are being significantly impacted and may need additional assistance.
There may be employees who are seeking second jobs to plug the gap in their growing outgoings. While acknowledging the reasons for this, employers need to be mindful of the Working Time Regulations to ensure employees are not working longer than a 48-hour week, which could also have a knock-on effect of a drop in employee performance and increased stress and worry.
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