As the cost of living continues to rise, explore effective strategies to support your team’s financial well-being and create a more resilient work environment.
CREDIT: This is an edited version of an article that originally appeared on ICAEW
In the current economic landscape, many employees are grappling with the persistent cost-of-living crisis, and the consequences of these financial pressures are not limited to the home front. The effects of these financial strains are increasingly seeping into the workplace, posing a significant concern for both employees and employers alike. As an employer, how can you step up and provide practical support to your staff during these trying times?
Boosting emotional well-being
As the cost of living continues to rise in the face of inflation and increasing interest rates, the financial worries of employees have become a source of strain, negatively impacting both their physical and mental health. According to research conducted by Nuffield Health, nearly half of the workforce has reported that these financial concerns are taking a toll on their overall well-being.
The interplay between money worries and mental health is complex. Money problems can both be the cause and consequence of mental health issues. To address this, it’s crucial for employers to enhance emotional support for their employees. Identifying signs of emotional distress is the first step, and from there, employers can guide individuals towards the emotional well-being support available to them. This could include cognitive behaviour therapy sessions (CBT) or employee assistance programs (EAPs), offering individuals direct access to specialists who can provide guidance and support.
Fostering money conversations
An essential aspect of supporting employees through financial difficulties is the normalisation of money conversations in the workplace. Senior leaders should take the lead in this regard, setting an example by showing empathy for employees and adopting an approachable management style.
Encouraging open discussions about money issues that either the employees or the business itself has faced can help improve financial literacy and create an atmosphere where employees feel comfortable discussing their financial concerns.
Alternative benefits for employee welfare
While raising baseline salaries in line with inflation may not always be feasible, employers can explore alternative means to enhance the overall remuneration package for their employees. Samantha O’Sullivan, policy lead at the Chartered Institute of Payroll Professionals, suggests that this could include providing paid meals at work, granting access to employee assistance programs to support employees dealing with stress and debt problems, or offering access to employee discount schemes.
Furthermore, employers can consider offering salary sacrifice options for initiatives such as cycle to work, pensions, and childcare voucher schemes, provided they comply with National Minimum Wage regulations. This not only helps employees during times of financial hardship but can also result in savings for the employer through reduced national insurance contributions.
Promoting financial literacy
Educating employees in financial literacy is a powerful tool for enhancing their ability to manage their finances effectively. Businesses can provide resources like financial benefits education, debt counselling, advice on debt consolidation, and workshops aimed at fostering financial literacy.
Offering employees the opportunity to follow up on a more personal basis through one-on-one meetings or private webcasts can also facilitate ongoing financial discussions.
Additionally, there are a plethora of resources available, many of them free, to help employees who seek advice on stretching their finances. Budgeting apps like Goodbudget and Spending Tracker help individuals keep tabs on their expenses, while apps like Nous assist in managing bills and finding the best deals.
Amplifying existing benefits
One effective way to help employees cut costs is to amplify communication about existing benefits. Season ticket loans, interest-free loans, private healthcare, insurance, and assistance with lifestyle benefits like gym memberships and discount codes can all contribute to reducing expenses and supporting employees’ physical and mental well-being during these trying financial times.
Tax-efficient support
Leveraging the trivial benefits scheme allows organisations to provide their staff with non-cash gifts, such as gift cards, up to the value of £50 with no tax or national insurance implications. This can be an invaluable means of supporting employees as they grapple with increasing costs.
Enabling flexible work arrangements
To alleviate the financial pressure on staff, businesses can consider introducing flexible working arrangements, such as allowing employees to work from home. This not only reduces travel-related expenses but also provides employees with the flexibility to manage their work-life balance more effectively. Flexitime options can also help employees avoid peak-time travel costs.
Transparent compensation discussions
Managers should foster open conversations about employee compensation, even during financial crises. Research from the human capital advisory firm, The Josh Bersin Company, indicates that well-communicated pay equity is 13 times more important for engaging and retaining employees than high levels of pay. Employees can feel valued through upskilling opportunities and workplace perks that contribute to long-term career growth and overall well-being.
Direct financial assistance
If it’s financially viable, establishing an emergency fund or grants that employees can apply for during times of financial hardship can provide vital support. Offering short-term, interest-free loans to cover unexpected costs is another way to ease the financial burden on employees.
In these challenging times, employers have a crucial role to play in supporting their staff through the cost-of-living crisis, both in terms of financial assistance and creating a supportive work environment. By offering practical support, businesses can help their employees weather the storm, fostering financial well-being and ultimately, boosting morale in the workplace.
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