The cost-of-living crisis is already taking its toll on nine in every ten consumers (ONS) in the UK, and it does not look like it will be going away any time soon. In fact, the situation is only going to get worse as prices continue to go up while wages remain stagnant. Employers want to do what they can to help their employees make ends meet, but sometimes there is just no clear budget available to increase salaries. Ian Moore explores some ways that employers can help their staff cope with the cost-of-living crisis without having to spend extra money.
Let us start with looking at how to make the salary fund larger.
There are several ways that employers can do this. Firstly, review future recruitment plans. For example, if a company is planning to hire five new employees in the next quarter, they could instead look at hiring only two and procuring some sort of automation support. This would save on salary costs and allow the company to redirect some of that money to their existing employees.
Another way to find extra budget is to consider your entertainment budget. If your company has a calendar full of company-sponsored outings or events, big seasonal parties and other over-the-top bashes, you could save tens of thousands of pounds by cancelling or scaling back on some of these. Similarly, you could put an immediate cap on the amount that employees can claim on expenses. Both of these tactics would show you acknowledge and sympathise with the financial difficulties facing much of the UK – a move many employees and clients would no doubt appreciate. Again, the money saved could be used to give employees a much needed financial boost.
If there is simply no budget to spare, employers can help their workforce cope with the cost-of-living crisis by boosting their income in other ways. This could include changing the pence per mile amount that employees can claim for business travel (if it is currently set too low), or allowing them to opt out of benefits such as private healthcare or dental cover in order to put the money back into their income.
It may also be possible to help them freeze their pension contributions, again giving their monthly payslip a boost. Not all of these will be possible for every business but it’s worth investigating these so that you can advise your employees either way.
Rewards and recognition programs
Another great way to help boost their income is to introduce a rewards and recognition programme whereby employees can earn money off their everyday spending at the supermarket or coffee shop. Perkbox, which is one such provider of this service, also helps employers reward their staff with discounted days off and even holidays.
There is also the option to offer a salary sacrifice loan which would give employees the opportunity to take out a loan at a lower interest rate and repay it through their salary over time. Salary Finance is one such provider of this.
Do not forget the value that expert advice can bring. Employers can help by offering professional support either through financial coaching or an EAP (Employee Assistance Program). Financial coaching can help employees to develop a budget and understand their spending patterns, while an EAP can provide support for employees who are struggling with anxiety or stress.
Many of your employees may not know that either of these are available to them but you can bring them to their attention and help them get started. Simply showing you are understanding of their situation and having an open-door policy so that employees feel comfortable coming to talk about any financial concerns they may have, could make a real difference.
Employers should be flexible
Another way employers can help their staff is by being flexible. By this we mean allowing staff to take on a second job if they need to or by being willing to negotiate working from home arrangements or offering flexible working hours. This may help parents save on crippling childcare costs or enable their partner to take on additional work.
Being a reliable source of support
Finally, and possibly most importantly, how ever you plan to support your employees make sure that they are all achievable before you share the news. If your employees believe you can help them and then you have to withdraw that promise of support, it could be disastrous for those affected.
The cost of living crisis is a real problem for many UK households, and it is important that employers do what they can to help their employees. While there is no easy solution, there are a number of ways that employers can assist their staff. By taking some of the steps listed above, employers can make a real difference in the lives of their employees and help to ease the financial burden that many are currently facing.
Ian Moore, founder of Lodge Court, has 27 years of HR experience, and has worked across a variety of industry sectors including IT, Telecommunications, Media Data Publishing, Financial Services and FMCG. This experience has made him one of the UK’s leading independent HR consultants, providing advice to everyone from growing startups to multinational corporations.