New research suggests that employer support for cash-strapped workers could disappear even though the cost-of-living crisis is not yet over.
Around three-quarters of organisations have introduced measures to ease employees’ money worries – including financial wellbeing advice, one-off payments, inflationary-based pay rises and interest-free loans.
Yet two-fifths of HR professionals say they have no plans to continue with the assistance – despite experts warning that the cost of living crisis could continue until the end of next year, and real wages might not reach early-2022 levels until 2027.
The survey of just over 200 professionals was commissioned by Access People, part of The Access Group.
Financial wellbeing advice, including workshops, hotlines and online materials will see the biggest drop-off, according to the poll.
More than half of respondents (52%) currently offer it yet only 17 percent say they will continue to do so over the coming months – a drop of 35 percent. One-off payments will decline from 24 percent to 4 percent, and inflation-based pay rises will nearly half, from 20 percent to just under 11 percent.
Charles Butterworth, MD of Access People, said:
“Organisations have clearly stepped up during the cost-of-living crisis – now employees could be losing this much-needed safety net. All signs suggest the economic climate will remain challenging for some time yet, and the ongoing stress could have a detrimental effect on people’s performance at work.
“Not every organisation can offer loans and inflation-based pay rises especially when they’ve seen their own costs rise. However, it is worrying that the biggest fall is in financial wellbeing advice. As Experian’s State of Payroll report makes clear, empowering people to manage their finances is a key part of an organisation’s employee engagement strategy – helping to reduce stress and improve productivity and wellbeing.
“We know from our own data that employers will actively seek out support when it’s available to them. Over the past year, there’s been a 56 percent uplift in the number of users accessing our employee assistance programme (EAP) within our employee benefits platform, which offers financial benefits and other wellbeing support.”
He added that signs were already emerging of people taking drastic steps to reduce their outgoings:
“Google searches from the past year suggest that the number of people thinking about opting out of their pension has risen by more than 36 percent. However, with the right advice, they may be able to save money in other ways, so they don’t miss out on the benefits a pension brings.
“There are further steps employers can take to reduce the financial burden on staff, from promoting benefits like employee discounts to on-demand pay, which allows them to draw down money they’ve accrued before pay day.”
On-demand pay is already proving popular with employees, according to data from Access EarlyPay, part of The Access Group. Some 93 percent of users have used it to manage their finances during the cost-of-living crisis, and around three-quarters of those who’d relied on high-cost credit previously said they no longer felt the same pressure because they could draw out their earnings earlier.
Abhishek Agrawal, Director of Access EarlyPay, adds:
“On-demand pay has really come into its own this year but its benefits extend beyond the current crisis. It empowers employees with the flexibility to manage their finances in a way that works for them, which as our customers have seen, can translate into more satisfied and engaged teams.”
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 the 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.