It has been a tough couple of years for our household finances. And budgets are about to get tighter, as council tax increases are confirmed across England.
Rates for band D properties (which are used as the baseline for other band rates) are rising by an average of 5.1 percent across the country, with residents in the northeast set to pay up to £420 more per year in council tax than equivalent households in London.
This is the latest in a string of announcements set to stretch households to breaking point, with rail fares increases, TV licence hikes and mid-contract price rises for mobile and broadband bills also on the horizon.
So far, so bleak. So why should employers care? And what can businesses do to protect their staff and their finances?
-
Council tax eats into employees’ disposable income
Council tax increases might not seem like an urgent concern for employers, but they’re yet another hit on employees’ wallets. It is likely that your team is already stretched thin juggling bills, rent, mortgages and other expenses. Debt to energy suppliers is at record levels, with households owing more than £1,000 on average. And the latest government data shows that incomes have fallen or stagnated across all income levels. Now, council tax increases mean employees are going to have even less disposable income to spend on essentials, let alone things they enjoy.
This gnaws away at morale. When you’re working hard but seeing your income absorbed by unavoidable bills, it is like being stuck on a treadmill to nowhere.
We all want to be using our earnings to build security – and do the things we love. Employers must recognise this reality and reflect on how they can meaningfully help.
-
Financial strain impacts how staff show up at work
Financial stress doesn’t clock out when your employees clock in. It impacts productivity, focus and job satisfaction. This is bad for staff and it’s bad for business. Our research at Nous shows that three quarters of HR leaders think cost of living pressures are impacting workplace performance.
As a responsible employer, it’s your job to recognise and address the very real issues your employees are grappling with outside of work. This includes financial anxiety, but also things like childcare, family responsibilities and health concerns.
Failing to face up to the ways our home lives impact our work not only impacts employee wellbeing but also undermines the success of your business. After all, a workforce bogged down by financial burdens is unlikely to perform at its best.
-
Rising bills exacerbate financial inequalities
It’s an unfortunate reality that rising bills often hit the lowest earners hardest. This is true with council tax, where poorer areas pay more than wealthier ones.
All regions barring London will soon see their band D council tax price exceed £2,000; and households in northeast England will pay up to £420 more than those in equivalent properties in London when the latest rises come into effect.
The system means employees on lower incomes residing in poorer areas will bear the brunt of council tax rises, widening the gap between the haves and have-nots.
To counter this, open the door for honest conversations about how the cost of living is affecting different staff in different ways. This helps to create a safe environment for people to raise concerns and ask for help. It also signals that you care.
-
Staff expect their employers to help
Employees want businesses to support them with the issues life throws at them. And for a growing number, those struggles come down to money. According to research by the CIPD, 65 percent of employees said it was important to them that their future employer has a financial wellbeing policy. Quite rightly, staff are looking to their employers for financial help.
Offering a competitive salary or wage is an obvious first step towards promoting financial wellbeing. But there are also things employers can do in addition to pay to make staff better off.
Look at benefits and support packages which can be of long-term financial benefit to staff, rather than investing in gimmicky quick fixes. Also consider which benefits will support the many, not the few. For example, money-saving tools like Nous can put hundreds of pounds back in employees’ pockets by saving them money on household bills. Not everyone requires childcare support or subsidised rail fares, but we all have bills to pay.
__
Jon Rudoe is the Co-founder and CCO of Nous.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
- Amelia Brand
- Amelia Brand
- Amelia Brand
- Amelia Brand
