This article originally featured on People Management and is available here.
Experts offer advice and best practice as workers continue to struggle with the cost of living.
Workers are increasingly reaching out to their employers for support in the face of the ongoing cost of living crisis, research has revealed.
Seven in 10 (68 per cent) HR professionals have noticed a rise in requests for financial support or education in the past year, according to a new report by Pluxee UK.
On average, a fifth (19 per cent) of their workforce actively approached HR seeking financial wellbeing support, the survey of more than 2,000 employees and 500 HR professionals revealed.
Graham James, director at Pluxee UK, told People Management: “The cost of living crisis continues to squeeze household budgets and create mounting anxieties for many employees.
“As they grapple with doing more with less, the pressure on both employees and businesses is undeniable.”
Additional research by Reward Gateway found that employees were not satisfied with the level of support businesses are offering – three in five (62 per cent) said their employers should do more to offset inflationary pressures and the rising cost of living.
So what impact has the cost of living crisis had in the workplace, and what can employers do to offer support? People Management asked experts for the answers.
‘Extreme anxiety’
“Worrying about finances can cause extreme anxiety, which directly impacts how we feel day to day,” says Bryony Williams, founder of HR consultancy The Glass Female. “Within the workplace, it can leave staff feeling unmotivated, unwell and less likely to perform at their best.”
She adds that it can become difficult for staff to focus if they are “constantly” worrying about their financial situation.
More than half of HR professionals have noticed the impact of financial worries on their workforce, according to Pluxee UK’s research, with two thirds (66 per cent) saying employees were noticeably stressed and 62 per cent saying they were less productive.
A further 32 per cent said their staff were more likely to take sick leave than before the cost of living crisis.
Helen Scullion, HR client manager at Limelite HR, tells People Management that she has noticed more employees seeking out extra hours to supplement their income or taking on a second job as a result of the cost of living. “Ensuring that all employees have access to flexible working hours will help remove barriers that may prevent people from taking on extra hours,” she says, adding that it would also reduce travel and childcare expenses.
Katy Foster, senior HR consultant at Cream HR, says she has seen the number of employers looking to review their rewards and benefits packages rise.
However, she adds that she has noticed many companies are also “feeling the pinch”, leading them to search for more cost-effective solutions.
James says: “The financial strain at work is evident, with a notable increase in the number of employees seeking early access to their wages.”
He says employers have a “heightened duty of care” amid the cost of living crisis, adding: “Ultimately, employee financial wellbeing and business profitability are intrinsically linked. Inadequate financial literacy leads to poor financial health, fuelling anxiety and reducing profitability.”
Reluctance to reach out
Employees were found to be unlikely to seek financial advice from their workplace, with just 12 per cent doing so, Pluxee UK found. Instead, 43 per cent consulted their friends and family, while 29 per cent used search engines.
Mandy Watson, director at Ambitions Personnel, says finances can be a very “emotive topic” adding: “Staff might feel a level of shame or embarrassment about coming forward or want to keep it a private matter.”
“We’ve got to recognise where people are – ensuring we get financial wellbeing to the same point mental health is in organisations,” says Chris Preston, director and co-founder of The Culture Builders. “Remove the stigma, provide support and advice and be ready to properly listen to people struggling.”
What support do employees want?
“A number of the organisations we work with are hearing, more and more, people asking tough questions about salary and package,” says Preston. “Sadly, this is pushing their cultures to a more transactional footing, as people are downplaying the benefits of a positive work environment and turning up the need for higher incomes.”
He adds that most businesses are also facing financial challenges, meaning “there’s little spare cash to meet people’s requests”.
Many employees prioritise increased pay over other forms of financial support, with 42 per cent considering leaving their job because of poor pay, according to Reward Gateway.
Its research also shows financial worries are most prominent among Gen Z (49 per cent) and early millennials (46 per cent), who are often at an earlier stage of their careers and therefore earning less.
Foster says salaries are “the first place to start” if looking to help employees. She says one of her clients took 5 per cent of their total wage bill and spread it in equal sums across their team, to “disproportionately benefit” lower earners.
Scullion advises that there are other ways employers can begin to tackle dissatisfaction with pay. “Employers can support their employees by ensuring they have a fair and transparent pay policy, jobs are advertised with the salary range clearly displayed and that they pay a living wage to their employees,” she says.
How else can HR help?
Employees are also looking for other forms of financial wellbeing support, Pluxee UK’s research found. Those employees who do not currently receive financial support said employee saving schemes (65 per cent) would be the most helpful measure, followed by access to money management tools (58 per cent) and financial education or advice (57 per cent).
Williams suggests employers collaborate with financial companies, which will often offer free wellbeing checks for employees. “Through creating a safe space to be open with an external adviser, and giving the opportunity to discuss their financial situations with professionals, staff can get personal guidance and advice tailored to their specific needs,” she adds.
Watson says: “A review of benefits on offer may be useful, with a shift away from ‘luxuries’ to alternatives that help with basic essentials – such as discounts on grocery shopping.”
She adds that some of their clients have introduced advance schemes, allowing staff to ‘cash out’ a percentage of their salary before payday, particularly aiding those in lower-paid roles.
Foster says employers can help by reducing the number of days employees are in the office to cut transport costs, perhaps through alternating weeks working from the office and at home to make weekly season tickets more efficient.