The cost of living crisis is becoming hard to ignore. We’re facing higher energy bills, higher food costs, and rising inflation, all of which can pose serious risks to our financial, physical and emotional wellbeing. All of this can have a major impact on performance at work, making it a potential problem for employers. But what can business leaders actually do to support employees through the cost of living crisis? We run through some key ideas for a responsive strategy.
What is the cost of living crisis and what are the risks?
A perfect storm of cost increases is hitting UK households hard. The combined impact of Brexit, the Covid-19 pandemic, a turbulent energy market, and now the conflict in Ukraine, have contributed to a tough situation in which inflation is at its highest level in 30 years and prices are rocketing. For example, energy prices: 18 million customers will see an average increase of £693 per year. And the cost of food has risen at the fastest rate in eight years.
This obviously risks pushing vulnerable people into poverty, but even those with more disposable income will have to make cutbacks. A third of households say they will even be restricting basics like food or heating. Struggling to put dinner on the table can put enormous strain on both physical and mental health.
The impact on businesses can be huge. About 4.2 million worker days were already lost due to poor financial wellbeing causing high levels of stress. This will undoubtedly rise as employees feel the bite of the current crisis, so addressing the issue could help businesses salvage productivity. And with an unprecedented level of employee turnover coming alongside price increases, businesses who can show extra caring and support may be able to improve recruitment and retention, too.
You could think about:
Helping employees get insight into their finances
Although you can’t do anything about price increases, you can help employees understand where they may be able to make small changes to their spending, saving or borrowing habits to mitigate the impact. A ‘lunch and learn’ session to think about monthly budgets could help. Or have you considered offering an employee benefit like ‘sidecar savings’ or a LISA?
Another great way to help employees understand their situation could be to offer them a financial healthcheck in the form of a short questionnaire that diagnoses their strengths and opportunities. Maji’s digital version also gives you an anonymised report that aggregates your employees’ responses so you can work out where else you can provide support.
Coaching to address key issues
Once your employees know where they could improve, you can go a step further by actively helping them achieve their goals through coaching.
You could link up with an experienced financial coach or advisor to provide learning workshops, offer 1:1 sessions, or ad-hoc support for employees. Alternatively, a combined digital and in-person solution like Maji could help make coaching more accessible for your team, empowering them to work towards their own goals and giving them the option to connect with a professional where needed.
Unlocking extra cash and benefits for your team
Did you know that a simple change to your pension arrangement could unlock extra cash for your employees and your business? Switching your workplace pension scheme to salary sacrifice will allow you and your employees to save on National Insurance costs, which have also risen in Q2 of 2022. Your employees will get a useful uplift on their pay that they can use to cover basic costs, save for tomorrow or splash on a treat. And you could use your savings to invest in useful benefits for your team that will do even more to support their financial wellbeing.
For example, have you considered offering discounts? Many employee benefits providers can offer you a range of options from restaurant vouchers to free coffees. You could also invest in employee healthcare, for example dental insurance. With rising numbers needing to use private dental care due to a shortage of NHS places, this could go a long way towards boosting the physical wellbeing of your team members. You could even offer free drinks or breakfast foods to make sure all employees are set up for the day.
Perhaps most pertinently, you could use the savings to invest in financial wellbeing support. We’ve already given some ideas in this article, but it’s worth considering what your employees really need and making sure your interventions are targeted. A platform like Maji, with financial planning tools, a comprehensive healthcheck, digital coaching and access to experts, gives employees the full package.
Responding to the cost of living crisis can help show employees you care, reducing their financial stress and making them feel more supported at work. This can, in turn, increase productivity and help improve recruitment and retention. This makes a strong business case for taking this seriously as an employer! Although you can’t address every issue facing your employees, you can empower them to take action.
To find out more about Maji can help you do this, book a demo.
Photo by 🇸🇮 Janko Ferlič on Unsplash