The UK is currently experiencing its biggest cost-of-living crunch in decades as UK inflation soars.
However, a mere 5 percent of employees believe their employer is doing enough to support them through the crisis, according to new research conducted by Blackhawk Network and Sapio.
Over 85 percent of employees believe that employers who support them during the cost-of-living crisis would make them more loyal to the business they work for.
On the other hand, employers who fail to address this issue are likely to lose their talent – almost two thirds (63%) would leave their current job to find an opportunity that provides better financial support during the current cost-of-living crisis.
Most (85%) employers agree that they have a duty to support their employees as the cost-of-living rises.
While raising wages might seem a simple fix, businesses are also impacted by rising costs and inflation making pay increases unviable.
Employees (83%) say that workplace benefits play an important role in helping to balance finances as the cost-of-living continues to rise; and 95 percent of employers agree.
It is telling that almost a quarter (24%) of employees admit they’ve already used their benefits package more during the cost-of-living.
In addition, almost three quarters (73%) of employer’s state that prospective employees are looking for employee benefits as part of the solution to the crisis.
Cost-of-livng: salary sacrifice
Dialling-up cost-of-living support through employee benefits is a must when talent is at risk.
Salary sacrifice, where employees are offered the option to pay for services or products from their salary before they receive it to reduce tax, can be found with offers on technology or gym memberships to save money that would otherwise eat into pay.
However, when employees were asked what the term ‘salary sacrifice’ meant, almost three quarters (73%) admitted they did not fully understand it, including 18 percent who had not idea at all.
In contrast, to almost all employers (98%) believing employees understand it to some degree.
There is a clear disconnect between the employer and the employee, yet salary sacrifice can save employees money and help in mitigating the effects of the cost-of-living crisis.
If employers want to support employees, they need to make information about benefits, like salary sacrifice, more accessible and digestible to prove that it can have a real-life impact on their current financial situation by making their pay go further.
Over half (53%) of employees say they would be more likely to use salary sacrifice schemes if they had a better understanding of how they work. But this is an issue that only employers can fix.
Better communication is essential to close the perception gap on employee benefits to be the support employees want and need during the cost-of-living crisis.
“It is becoming increasingly clear that employers have a vital role to play supporting their employees during the cost-of-living crisis. But the rising costs also mean that businesses are unable to offer blanket wage increases. Our research takes an in-depth look into the current state of employee benefits and the perceptions of the employees who are in a position to use them. With the release of this research, we hope to give businesses the tools they need to improve their benefit packages so they continue to support staff throughout the crisis,” says VP EMEA Incentives & Operations at Blackhawk Network, Chris Ronald.
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.