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The Cost-of-living crisis – What can employers do to help?

It seems no sooner have we started to see the light following a two-year battle with Covid-19, a turbulent time in politics and the divisive opinions brought on by Brexit (that’s a whole other article!)  than we are now facing soaring energy rises, fuel cost increases, fears over rising interest rates and crippling exit fees.  Meanwhile food costs are reportedly at the highest rate in decades with the CPI data from the British Retail Consortium reporting an increase of 12.6% year on year as of July 2022.

The Economy is also being affected by Russia’s invasion of Ukraine which has triggered a worldwide increase to cost of living and although The Organisation for Economic Co-Operation and Development (OECD) have advised that whilst the UK has limited direct financial and trade links with Russia and Ukraine, the rise in energy is unavoidable.

New Prime Minister, Liz Truss, brought some welcome relief when she announced on 8 September 2022 that energy bills would be frozen at £2,500 per year average for a period of two years in addition to the £400 Energy Bill Support Scheme but this is still a difficult increase for many.

With the above in mind, it will come as no surprise that employees will be in search of higher salaries to combat all of these factors. With added financial pressures also placed on businesses, it’s simply not feasible to sustain continued salary increases long term and efforts will need to be made to protect the business particularly through such a period of financial uncertainty in the coming months.

There are cost-effective measures employers can take to support their workforce and effort should be made where possible to demonstrate these benefits, both as a sign of willingness to follow a duty of care to the workforce and to retain talent as part of the business’s contingency planning through this difficult time.

Some ideas of how this can be achieved as follows.

Holiday allowance above statutory minimum

The statutory minimum holiday entitlement for a full-time employee in the UK is 28 days inclusive of bank holidays (or 5.6 weeks), increasing this is an attractive benefit to all employees particularly those who may have childcare costs to contend with throughout the school holidays.

A Days Leave for Life Events

Whilst many businesses operate a compassionate leave policy to support with the loss of a loved one, often the day off to allow employees to celebrate significant life events is overlooked. Some examples of what this could include are a child’s very first day at school, a family wedding, moving house, or child’s graduation, this kind gesture will help employees feel valued.

An Employee Assistance Programme (EAP)

Appointing an external support provider whereby employees can utilise for anonymous advice on personal matters as well as financial support will go a long way when people feel they have nowhere to turn or feel uncomfortable speaking to someone known to them. Most providers can provide quotes based on headcount and services like this are proving to be valuable in tackling all areas of employee wellbeing.

Financial Planning

A centralised hub such as an intranet or notice boards whereby factsheets and links to getting the best deals and other cost saving incentives for use on shopping or public transport could help employees to save. This communication space could also be used for signposting employees to food banks, charities to support with financial hardship and even local charity shops or hiring clothes via agencies for big events rather than buying new. Some companies even engaged external financial planning consultants to support financial education amongst employees.

Subscription to Recognition and Reward Platforms

Services like this offer discounted social activities, supermarket savings and even freebies such as a monthly coffee at selected retailers! This could prove a handy tool to employees who will generally be provided with login details upon commencement of employment and receive emails to their chosen email address with the latest deals via a subscription funded by the business.

Payment breaks on workplace loans

Some businesses offer a workplace loan or an advance on wages when an employee is going through financial hardship. Allowing a break in re-payment if the employee is going through a particularly challenging time ,which could be for a number of reasons such as subsidising funeral costs for a relative, legal fees for a personal matter or even a single parent struggling to fund a child’s school uniform expenses, is something the business could explore as a means of demonstrating compassion to the employee naturally. This would depend on the circumstances of the business and consistency in approach would need to be factored in.

Cycle to work

With the cost of fuel prices showing no signs of stabilising more people are looking at alternative travel arrangements, a cycle to work scheme is a UK Government Tax Exemption initiative which was introduced in the Finance Act 1999. The purpose of the initiative when it was first introduced was to reduce the strain on the environment and promote healthier journeys to work, the business buys the employee a bike and this is paid back using salary sacrifice so the employee is saving as they do not pay Tax or NI Contributions on the monthly fees.

Flexi Time

Flexi Time is another attractive benefit which allows employees to choose the start and end time of their working day providing their weekly contracted hours are adhered to. This can be particularly useful for those who rely on public transport as the cost of travel is often more expensive during ‘peak hours’ and those wanting to avoid costly childcare costs such as breakfast and afterschool clubs. Regardless of individual circumstances, flexibility in the way in which we work takes some of the strain off individuals where possible.

Funded socials

An annual celebration subsidised by the company will go some way to demonstrate the business’s appreciation of hard work employees have put in and give everyone the opportunity to reflect and enjoy themselves. If budgets are tight and parties are out of the question, alternatives could be a gathering in the office with food and drinks provided, hiring an ice cream van in the summer months, a barbeque on the premises or sports afternoon at a local park.

Contribution to Home Office Equipment

With more companies operating an agile working policy since the onset of the pandemic, being able to reclaim the cost of home office equipment will support those working from home.

In summary, there is no denying that as a population it has been a trying time causing worry and distress to many. Whilst businesses are also under pressure with the rise on inflation, there are creative ways to help employees struggling both emotionally and financially and what may seem like relatively small gestures could go a long way in retaining talent and demonstrating value to the workforce.

For more advice and to get in touch with our team click here 

Cost of Living Crisis