As a business leader, cost of living help for employees is probably on your mind, especially if you have had employees asking for pay increases. Of course, you're not alone. Indeed, in the last few weeks, we have had a rapid rise in the number of clients requesting our advice on how to help and support their employees.
So here is your guide to Cost of Living Help for Employees.
7 Minute Read.
The Impact on Employees
With the very worrying cost of living crisis, UK households are seemingly stuck in spiralling living costs, which will only become more challenging through the winter months.Therefore, it is a very worrying time for many.
Of course, inflation rates are at their highest in decades, and both individuals and businesses feel the impact of soaring energy, food, housing, and transport costs.
Consequently, people with the lowest incomes suffer the most. Particularly worrying, the Joseph Rowntree Foundation say that low-income families live through a frightening year of financial fear, with many falling behind on bills, going without essentials or taking on high-interest debt.
"Low-income families will hand over 26% of their income after housing costs in 2023/24 to pay for gas and electricity compared to just 12% two years previously. Middle income families will only use 11% of their income meeting the same costs, a rise from 4%."
Source: Joseph Rowntree Foundation
The Impact on Your Business
Of course, cost of living help for employees is likely to be a concern for you since many employees are considering changing jobs for higher pay. In this situation, you will want to do what you can to keep your staff.
But it's not just households that are suffering. A point often overlooked in the media about employees demanding more pay, is that as an employer, your business is likely facing spiralling costs on top of the recovery from the health pandemic, and the impact of Brexit.
Therefore, the level of pay increases you can afford may be limited. However, with labour shortages and the high cost of replacement, staff retention is likely to be one of your key critical success factors.
Let's look at some numbers to put this into context.
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Employees Planning to Leave Their Jobs
Between Two and three out of every five employees are considering leaving their jobs.
Almost half of 5,000 UK employees surveyed (48%) cite the reason for leaving as better pay and benefits.
While significant pay increases and costly benefits may not be realistic for you, there is hope, and there will be something you can do to help. But clearly, it is essential to do what you can for staff retention and employee well-being.
10 Ideas for Cost of living help for employees
In light of the above issues, here are ten ideas on cost-of-living help for employees and how you may be able to help support them through the crisis.
- A one-off cost of living discretionary bonus could be paid as a set amount over the winter months to assist with spiralling costs. It is essential to make it clear however that the discretionary bonus is a one-off bonus, and the payment will not set a precedent for future bonus payments.
- A second pay increase. You may already have an annual salary review. But you could provide a one-off inflation-busting pay increase to help employees with the spiralling cost of living. Again, make it clear that such an increase is discretionary and does not set a precedent for future pay increases.
- If requested and where practicable, allow your employees to work from home, saving on commuting costs.
- Reviewing and or expanding your benefits. For example, offering enhanced pay during family-related leave, payment for professional subscriptions, and staff discount schemes. Consider making your benefits package more flexible so employees can swap certain benefits they do not need for money.
- You could offer discretionary interest-free hardship loans to employees. However, this will only help if the employees can afford to repay the loan. So, have parameters in place with carefully drafted wording and signed paperwork.
- Utilise an external provider to offer employees online or face-to-face financial education programmes.
- Signpost employees to debt counselling. If you have an existing employee assistance programme, make sure they know about it! Also, there is free impartial advice on money and debt from:
a) The government's money and pension service (or phone 0800 138 7777).
b) Turn2us: This national charity provides practical help to individuals who are struggling financially.
- Introduce a company food bank for employees to contribute to for less fortunate colleagues to access.
- Set up a clothing recycling service where employees can bring to work unwanted clothes that they no longer want that other employees may need.
- An internal advert board could promote skills and services that employees can offer each other. There may be employees with specific skills, interests, or hobbies outside of work that they can advertise to help other employees. For example, a keen gardener helps another employee (a keen baker) in exchange for a birthday cake.
Are There Other Options?
Although survey statistics show that many employees are ready to find another job, it's not all about more money. Evidently from various surveys, the remaining half of employees cite other factors that will affect their decisions. For example:
- A good working environment and company culture.
- Whether they feel valued.
- Their job needs to give them a sense of purpose.
- Training and development.
- Career progression.
According to the CIPD, more than two in five employees have already left a job because of a bad manager. Their survey also discovered that over half (53 per cent) of employees considering leaving their jobs, cite the reason being because of their manager.
So, do your management and leadership listen to employees, empathise, and help their situation when possible? As an employer, it is now more essential than ever to be very aware and understand how external issues affect your people's well-being and motivation.
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It's Good to Listen
As a business leader, offering benefits you think your staff will thank you for is tempting. But however well intentioned, you could make incorrect assumptions about what they want. Indeed, with any employee-focused initiative, you can inadvertently create bad feelings or resentment. Therefore, it’s as well to avoid an assumptive top-down approach.
Whatever you do to improve your programme, start with a conversation between you and your teams. Please give them a voice, engage in the discussion, and discover what will truly make a difference to their well-being. If you can find a way to give it to them, you will have happier and more productive employees.
Naturally, pay is critical especially for direct cost of living help for employees, so you will likely want to help your employees as much as possible. Also, we have outlined some ideas above that may help your staff.
However, there are other factors that can help you retain the right talent. Indeed, since some of your employees could be looking at other job opportunities, you may need to review how well you stack up compared to other companies. As a starting point, we recommend you read the following articles:
Also, contact the SVC HR team if you have any questions or want to discuss this topic further. Don't hesitate to get in touch with us on 01206 262 117.
Get Support on Cost of Living Help for Employees
Providing cost of living help for employees can or anything to do with employee benefits can be tricky. We know that sometimes you need a confidential and experienced sounding board to think things through, and we can help.