In July 2022, 91% of UK households reported an increase in their cost of living – up from 62% in November. And based on forecasts from the 2022 Spring Budget, real household disposable income in the UK is set to drop by 2.2% in the 2022/23 financial year – representing the biggest fall in living standards since this type of data was first produced in the mid-1950s.
With high inflation, tax increases, astronomical energy bills and the rising cost of everything from food to fuel placing a drain on people’s finances, we’re looking at what you can do to make life more manageable for your employees.
But why should you do anything at all?
Worried employees are distracted employees
According to research from the Office for National Statistics (ONS) earlier this year, 77% of UK adults are worried about the rising cost of living – with 50% feeling those worries almost every day. What’s more, The State of Financial Wellbeing report found that 76% of people who are worried about their finances are suffering a decline in their mental health as a result, one in ten (10%) employees have missed work because of money worries, and nearly a fifth noticed a drop in productivity.
If your employees are living in a constant state of anxiety about how they’re going to make ends meet, get any pleasure out of life, or even travel into work, they’re not going to be giving you their all. They’ll be distracted at best and entirely disengaged at worse. And as we say, a happy, healthy, and engaged workforce is one of the greatest assets you can have.
So, what can you do to help? And are there any actions you need to take to safeguard yourself?
Acknowledge the need for extra income
During these challenging times, you might find that some of your people will turn to other revenue sources in a bid to make life more comfortable – whether that’s a second job, freelance work, or side business. It’s important to note that any additional work could lead to your employees exceeding the 48-hour weekly cap imposed by Working Time Regulations 1998 (WTR) – and you would be in breach. London-based law firm Prettys recommends issuing a memo asking your employees to advise line managers of any additional work, and to sign a ‘Working Time opt-out agreement’.
But when broaching this subject with your teams, it’s important to show compassion and understanding around their situation. Few people want to get a second job, so before having the conversation, ask yourself whether your employees are being fairly compensated in the current climate.
Consider financial help
As the cost of living continues to rise, we all need more money to get by. Pay rises will of course go some way towards helping to ease financial stresses amongst your teams – but there are other ways that you can help, too.
Some employers negotiate discounts on behalf of their workforce – for instance, retail discounts, offers on eating out, transport deals, discounted gym membership, tech purchase schemes, cut-price days out, and even competitive mortgage rates. With bigger buying power, your company could make a real difference to your employees’ cost of living.
You might also want to consider offering financial education seminars through an expert to give your people a greater understanding of how to manage money, budget effectively, and pay off debt. Some companies even offer a loan consolidation service through their payroll to ease the pressure on employees who may be in debt.
Encourage remote working
The cost of commuting may be a concern for your employees – and with the pandemic making remote or hybrid working the norm, now is a good time to be as flexible as your business will allow. If your teams do work from home, it’s worth reminding them that tax relief is available on gas, electricity, and business phone calls.
You can find more information about this on the government website.
Take the lead on health and wellbeing
With less disposable income and increasing amounts of stress, you might find that your people can’t prioritise the things that would ordinarily keep them happy and healthy. But by removing the financial burden and affording your teams the time they need to invest in themselves, you can help to reduce the chance of ill health, increased sick leave and poor mental health.
If you have an Employee Assistance Programme (EAP) in place, or are using an employee wellbeing platform like GoVida, it’s worth regularly reminding your people about the resources available to them. Equally, providing access to healthcare professionals and giving employees the green light to make appointments and seek support during working hours, can go a long way towards safeguarding the health of your employees.
To find out how GoVida can help you to care for the wellbeing of your workers during these challenging times, book a free demo now.
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