With inflation rates sitting around 10%, the pound crashing, and the prices of food, energy, and fuel increasing exponentially, the cost of living crisis is affecting us all in the UK. Employees across the UK are concerned about their financial situation and are yearning for support.
The challenges brought by the cost of living crisis affect employees in more ways than one. The impact on employees' mental health is significant, with 44% of employees worried about their financial situation and 24% of employees seeing a negative change in their mental health. With the reduced ability to spend on 'non-essentials', employees cannot find escape in hobbies, luxuries or any other entertainment; a further detriment to their mental health.
Challenging time for HR and leadership teams
Employers face a myriad of workplace issues, including the cost of living. Over two-thirds of employees admit they have experienced being stressed and overwhelmed in recent times because of the increased cost of living they are experiencing.
Staff retention and recruitment have emerged as significant challenges for employers. Despite over 1.3 million job vacancies in the UK, organisations remain understaffed and struggle to retain staff, particularly younger employees who aren't afraid to job hop. Many organisations are upskilling existing employees to address staff recruitment and retention issues. Yet many organisations are unable to maintain suitable levels of staff, damaging organisational culture.
To resolve these issues, some organisations have turned to pay increases and one-off bonuses to support their employees with their increased cost of living. Others have looked at providing other benefits, such as salary sacrifice schemes and employee discount solutions. Despite the support already set in place for employees, there are always more ways to help staff cope with their financial wellbeing.
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Cost of living and the workplace
Many organisations face the same prevailing issues and challenges of the modern workplace, including staff turnover, labour shortages, and the cost of living crisis. Industry-leading employee engagement company, WorkBuzz, produced exceptional insight into employee engagement, touching on many of these problems. Their findings revealed valuable insights into the challenging balance of hybrid working and the combined focus of HR departments across the country.
Terryberry's managing director, Ian Feaver, shared his insight with WorkBuzz to deliver his thoughts and solutions to the cost of living crisis and its effect on employees, employers and the workplace.
"The cost-of-living crisis is bringing a whole new set of challenges for people across the country, which is having a catastrophic effect on both the financial and personal wellbeing for those affected. This is also going to have a potentially severe impact on employers, who have already been facing huge challenges in retaining and engaging people."
"The impact of financial insecurity is creating pressure on employers to match inflation with high pay rises, which isn't sustainable in most cases; so then this leaves companies in a perilous position of risking losing their people or having people in their employment who are completely stressed out."
Despite the challenging situations employers are facing, all is not lost.
"Employers can come through this by being proactive in how they adapt to this situation and support their people. Employers need to express concern and care for their people; concern for their financial security and care for their physical and mental wellbeing."
What Must Employers Do During The Cost of Living Crisis?
Delivering the right kind of support to employees is crucial as the increased cost of living makes employees' needs harder to fulfil.
Ian further discussed how organisations must adapt their focus to the basic needs of employees, ensuring that staff can provide for themselves or their families and live comfortable lives.
Recognising employees' needs is also essential at this time. Sharing your plans and showing that you recognise the current financial crisis can help spread a positive message across your organisation. Recognising that your staff needs extra support can maintain a positive attitude and sense of belonging, benefiting both staff recruitment and retention.
Financial wellbeing is also a big concern for organisations. According to the CIPD, earning a sufficient wage that allows for a reasonable lifestyle is the most crucial aspect of financial wellbeing for 75% of workers. Finding ways to support financial wellbeing is also paramount during this challenging period and has become a significant focus for HR departments in the UK.
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How can employers help employees during the cost of living crisis?
Not intervening or offering enough support to staff at this time can increase the likelihood of employee burnout as staff feel under appreciated. A study found that 31% of employees are already taking extra shifts to cope with the rising cost of living. Leading staff to look elsewhere for employers offering sufficient salaries and adequate financial benefit solutions.
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Employers can implement various solutions into the workplace to support employees from offering hybrid working to providing extra benefits, such as Terryberry’s Help for Employees.
As part of the government’s Help for Households scheme, Terryberry partnered with the UK government to provide employees with a low cost (cost effective) benefits solution to provide employees with exclusive discounts.
Help for Employees enables employers to provide essential savings and wellbeing support to employees. Employees can save up to £3,000 a year on every day shopping at supermarkets and high street shops, motoring discounts, dining out, leisure discounts, and more.
Help for employees also offers employees access to our dietary, fitness and mental wellbeing support and advice, which is so essential at this time. Our wellness section helps employees cope better financially with significant savings and also have access to much needed well being content.
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Support employees and boost workplace morale with Help for Employees. Gain access to exclusive discounts to help your employees stretch their income for only £5 per employee per year. Get started today! Contact us