Many businesses have only just started to return to some level of normality following the COVID-19 global pandemic, but there is now a fresh threat to staff in the form of the cost of living crisis. Whilst during the pandemic, employers were encouraged to consider whether they were able to offer enhanced sick pay arrangements to better support their staff with a focus on health and overall wellbeing, it is now a question of considering the very real concerns that staff may have about their living costs, including the cost of getting to work itself.
It is impossible not to have noticed the increased food, energy and fuel costs over the last few months that looks set to get worse by the autumn, but is this something that employers can do anything about and is it their responsibility? It has been widely reported that Rolls Royce has offered a £2,000 cash payment to 14,000 of its workers along with a 4% backdated pay rise. Whilst a 4% pay rise falls short in real terms in light of inflation currently at 9% in the UK, it is still an indication of the company’s acknowledgement of the current economic climate and an attempt to bolster staff loyalty and help to attract new talent in an already challenging recruitment market.
For some employers, the cost of living crisis may have already started to affect their business and overall productivity. Recent research by the Centre for Economics and Business Research (CEBR) found that 10% of employees have already missed work due to financial problems. The risk of doing nothing is that employees become increasingly concerned about their financial wellbeing with staff becoming disengaged and distracted with increased levels of sickness absence. Employers may feel that they cannot afford to offer pay rises, but are there any other business practices or benefits that could be introduced that would support employees through this difficult time?
It is perhaps time for employers to be creative and this may include considering initiatives such as:
- Increased staff discounts
- Reviewing profit share arrangements
- Introducing an emergency fund
- Interest free crisis loans
- Season ticket loans
- Selling back unused holiday entitlement (subject to the employee having taken the statutory minimum days holiday)
- Hybrid working in order to reduce travel costs
- Staff food banks
- Introducing the use of an income streaming service such as Wagestream that allows employees, particularly in the hospitality sector, to instantly access their pay before their normal pay date.
- Financial wellbeing assistance
- Salary sacrifice schemes to allow employees to access childcare vouchers or the ability to buy a bicycle through a cycle to work scheme.
This will undoubtedly be new territory for employers and like they had to do in the pandemic, they will have to learn as they go. Whilst the initial response may be that employers simply cannot afford to financially support their employees, the question is whether they can afford not to in an increasingly buoyant market where retaining key staff is crucial.
If you have any questions about staff pay and benefits and how to support your employees through the cost of living crisis, please contact Julie Edmonds, Head of Employment, by email on email@example.com; telephone (0207 644 7286) or contact her on LinkedIn.