At the beginning of the year, economists predicted the UK will face one of the worst recessions and weakest recoveries in the G7 in the coming year.
Price rises, high inflation and increased interest rates spell challenging times ahead for both businesses and individuals as the cost of living crisis impacts people’s finances.
Data from the Office of National Statistics reveals three quarters of adults are worried about money. This is affecting business productivity and engagement.
According to The Financial Capability Strategy for the UK, one in four workers have lost sleep over money worries, over half say that current financial worries stop them from performing at their best and almost half (46%) say that financial worries have impacted their relationship with their manager.
Furthermore, 18 million working hours are lost to financial stress in the UK every year. Yet according to research, almost half of employees feel uncomfortable discussing their financial wellbeing.
This creates a challenge for employers on how to identify those who need help – and provide them with assistance in a sensitive way.
Businesses are often judged upon their actions in a crisis, so those that support employees may be better placed to reap the potential benefits of improved loyalty and retention, as well as making it easier to recruit.
Remove the stigma and isolation
But while many businesses aren’t in a financial position to raise pay in line with inflation, there are other ways to support employees.
Employees may not feel willing or able to tell their employer about their financial troubles because they are embarrassed.
A good place to start is to challenge the stigma by breaking the wall of silence around financial wellbeing and provide opportunities for employees to talk and learn about it.
Removing the sense of isolation people feel when dealing with financial problems is crucial.
Offering financial education workshops and programmes is another way to equip employees with knowledge and skills to make better financial decisions. Skills such as budgeting and managing personal finance can help individuals make the most out of their money.
Flexible working and hybrid working options could also help employees reduce travel costs or manage childcare to enable a better work-life balance.
Others may want to reduce their household bills by being in the office more. Talk to employees and find out if there are adjustments the business can make to where and how they work to help them during the cost of living crisis.
Review employee benefits
This is also a good time to review employee benefits to ensure they still meet the needs of the business and employees.
Benefits such as health cash plans, private medical insurance and dental cover can help employees save money, access treatment faster and return to work more quickly.
Other benefits that could help employees save costs include, gym discounts, a green car scheme, childcare vouchers and a cycle-to-work scheme.
Most employers offer some kind of employee assistance programme (EAP), but may fail to tell employees about it, so checking what is available and making sure people are aware of it and how to access is key.
EAPs include telephone and face-to-face counselling, and debt advice – which are all invaluable.
Other benefits employers could consider are lifestyle benefits to help employees save on many of life’s essentials, even including the weekly or monthly shop.
Annual food inflation jumped to 13.3% in December, up from 12.4% in November, with further increases expected according to the the British Retail Consortium (BRC).
Even a small saving can add up over the course of a year and make a big difference to people’s food bill.
