With a tough winter looming, we look at five ways to support your workforce as inflation bites.
UK workers are facing an unprecedented cost-of-living squeeze, with inflation outstripping increases in pay and benefits. Prices for essentials, especially energy and food are rising fastest, putting the lowest household budgets under severe pressure.
Employers are feeling the strain too – many are already struggling with rising costs of energy and raw materials, and must now decide what size of pay increase is both fair and manageable. They could also be faced with an increasingly disengaged workforce, as people become distracted and anxious about the state of their finances.
So how can companies help employees through the cost-of-living crisis?
1. Use a new lens for your reward strategy
The most obvious answer is to make sure pay rises are keeping pace with inflation. But with inflation currently at 10.1% and set to remain high for some time – enterprise-wide raises of this magnitude might not be feasible for all businesses.
This is why many companies have opted for a one-off payment to help mitigate the crisis. These are undoubtedly helpful, but look like more of a sticking plaster than a long-term solution.
Whatever you decide on pay, it’s important to look at your strategy through the lens of the lowest paid. For example – one-off payments could inadvertently affect entitlement to universal credit – so staggering the payment across a number of months could be a good idea. And it’s those most in need who will get most benefit from double-digit pay reviews.
2. Review your benefits package
Take a look at your benefits package and make sure it’s designed to help those most in need.
Benefits like discount schemes for supermarkets are great – everyone can use them, and according to Perkbox, employees using these schemes are saving an average of 6% on their grocery bills.
Another popular benefit is a Healthcare Cash Plan, which allows people to claim back the cost of visiting an optician, dentist or physio.
3. Communicate clearly
At times like this it’s especially crucial your workforce understand what benefits are on offer and how to access them.
Yet recent studies suggest that between 40 and 50% of employees don’t understand the benefits offered by their employer.
It may be that your benefits package is fit for purpose, but the way it’s communicated needs some work to make sure your people can take full advantage.
We’d suggest reviewing your communications to make sure messages are relevant and timely, using plain English. It’s also important to deliver messages through the right channel – for example using email to contact a retail worker on the shop floor is unlikely to be enough on its own.
It’s also worth using segmentation. Think about which benefits are most relevant to which people, and target your messages accordingly.
Finally it’s important your managers are fully equipped to have empathetic conversations with employees who are worried about their finances or confused about their benefits.
4. Review your financial wellbeing policy
According to the CIPD, around half of employers don’t have a financial wellbeing policy, despite the destabilising effects of the pandemic.
At the simplest level a financial wellbeing policy could mean clearly directing employees to independent guidance on money management and debt. It could also encompass crisis loans to provide short-term help with expenses, or payroll lending to help those already struggling with debt – especially given rising interest rates.
We’d also suggest considering a commitment to pay the real living wage, and becoming accredited as a Living Wage Employer.
5. Consider a financial education programme
Financial education in the workplace can make a huge difference to struggling employees. You can’t underestimate how much fear and anxiety is caused by the negative headlines which dominate the press each day. Education starts with helping your people see beyond the headlines.
According to research by Nudge, 68% of people whose employer doesn’t offer any financial education said they’d welcome it.
At a basic level this can include learning about budgeting, saving and debt, as well as money-saving tips. Further topics to cover could include retirement planning and education around investing for the future.
Many people discover really important lessons through these programmes, which go on to have a significant impact on their finances and overall wellbeing. And your business is more likely to be successful when your employees aren’t worrying about their money.
What are we doing to help?
At BPZ we’re dedicated to helping you help your workforce through tough times.
We’re currently developing some products and services to support employers in easing the burden of the crisis for their teams. If you’d like to know more, or get involved, we’d love to chat.
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