How can businesses help employees during the cost-of-living crisis?
September 21st 2021 | Posted by Phil Scott
The UK cost of living crisis is causing major issues for people across the country. Many individuals are already having to decide between eating and paying fuel bills and the situation is only likely to worsen as autumn has now arrived.
The obvious answer is for employers to increase wages in line with inflation, although the government has warned against doing this. A lot of businesses are also unable to increase wages by such a significant amount. If wages do not increase, the financial impact on employees could lead to serious problems for them and the business. What are these potential issues, and how can HR teams work with business leaders to address them?
Risks to employee health and the business
Money issues are connected to mental health, so there is a good reason for employers to be concerned about the financial difficulties faced by employees. To prevent difficulties from affecting the mental health of the individual, the employer, and the HR team, have a duty of care to provide any advice and support possible.
It’s not only the individual that is impacted either. When people have pressure on their mental health, they are unlikely to perform at their optimum level and they may take a significant length of time off sick. These effects of mental pressure have a negative impact on the overall performance of the business and potentially on productivity and profits.
What action can employers take?
Looking at the impact financial difficulties can have on individuals and the business; it becomes clear why it’s essential for a business to take action. HR managers, and their teams, have a pivotal role to play.
If a salary rise is possible, this is a positive way for businesses to improve the financial position of their employees. However, there are other positive steps that businesses can take.
Educating employees on financial matters is something that HR can take the lead in. This can include using advice resources that are already available and supplementing them with information that is more tailored to employee needs.
Top HR managers are including financial well-being workshops in their employee programs at this difficult time. These workshops can include a variety of information such as advice about employee benefits like season ticket loans. Wider, more general information can also be provided, such as advice about the potential to claim government-issued benefits if an employee has a low household income.
One of the most vital aspects of advice provision is offering information about pension decisions. Employees may be tempted to reduce pension contributions when their finances are stretched. The most experienced HR professionals recognise the importance of ensuring employees are aware of the future impacts of any pension decisions they make.
In addition to offering advice to employees, businesses can also provide employee benefits to help ease financial pressures. There is a range of benefits that can be considered including insurance, gym membership, shopping discount codes, and private healthcare.
Advice, support, and benefits may not remove all financial worries from an individual’s shoulders, but they are a big help to employees and also assist the business in maintaining a healthy and productive workforce.