The rising cost of living is negatively impacting the financial wellbeing of your team – and therefore your organisation. Delaying action is not an option, so what should you be doing now to support your staff through the cost-of-living crisis?
Focus on savings and re-building financial resilience
In our State of Financial Wellbeing report, 50% of UK employees told us they wanted their employer to better support them to save money in 2022 – ahead of anything else. Despite this clear preference just 18% of employers plan to do so.
The pandemic significantly affected the savings of UK workers. A 45% rise in negative life events throughout 2020, predominantly income shocks such as reduced hours and furlough, meant employees were increasingly forced to raid savings for daily living expenses. Even pre-pandemic, 50% of UK households didn’t have enough saved to cover an unexpected bill of £100.
What should employers do? Focus on the how. Most people intrinsically understand why they need to save, but it’s the gap between knowledge and action that’s difficult to bridge. Proven technology, such as Wagestream’s automated workplace savings product, makes it as easy as possible to save something every pay cycle.
Spin up a cost-of-living money signposting service quickly
It’s hard to talk about money and this puts line managers and other internal stakeholders off starting a conversation. But it’s important to note the role of the organisation is not to solve problems but to signpost employees to the right services and tools so they can help themselves.
Employees in crisis may think their situation futile, so an easy first step is simply to provide a list of resources that employees can draw upon depending on their unique financial situation. This can be posted centrally or locally or given to line managers to cascade down to their teams.
A more advanced option is to provide one-to-one financial coaching, which provides a much more personalised signposting service along with accountability for behavioural change, which is important to improving long-term financial wellbeing.
Challenge the stigma to reduce isolation
The cost-of-living rises are putting pressure on UK employees and increasing worry. In our State of Financial Wellbeing research report, we found that 68% of those experiencing stress because of money did not tell their employer about their troubles – and most cited embarrassment or shame as the primary factor behind their decision not to share.
This stigma is entrenched, but the mental health stigma was entrenched too and as a society we’ve made positive progress there. When it comes to money, there are multiple things employers should be. Firstly, use every opportunity (and there are lots) to open the dialogue about money: there are external prompts, such as the cost-of-living crisis, as well as internal prompts such as pensions reviews and promotions.
Secondly, encourage the sharing of stories from those willing to do so. There’s nothing that makes people feel less alone than hearing from others with similar stories. Finally, you can train money champions to play the role of advocate for sharing concerns and opening up conversations, just as many organisations trained mental health first aiders for the same purpose.
Do a ‘cost of coming to work’ audit
Do you know how much it costs for your employees to come to work for you? Those facing additional income pressure due to the cost-of-living crisis may be hit hard by some of these.
Do most of your staff live a long way from the workplace, making them reliant on their cars (petrol is rising and the costs of raw materials for repairs has gone up)? Do they still have to wait six weeks for their first pay packet when they join? Do they need to pay for uniforms upfront? Do you offer season ticket loans? Must people wait 4 weeks to get repaid expenses?
Some factors you can control and some you can’t, but doing this audit may throw up some genuinely easy ways that you can adjust your policies in order to better support people through what is increasing and sustained pressure on their ability to make ends meet on a day-to-day basis.
Worried the cost-of-living crisis is harming your staff? Download our State of Financial Wellbeing report, based on a survey of 5000 UK employees and 600 senior HR directors.