Rising energy costs, not helped by the war in Ukraine, is driving inflation to a 40-year high.
The current economic environment is having an impact on the lives of employees up and down the country. Food, fuel and utility costs mean employees' wages are being stretched in some cases to breaking point. Many employers want to help and can do so despite the challenging economic circumstances their businesses are having to negotiate.
Having come through the past two years and seen the huge increase in home working, employers may be able to assist employees by continuing to offer that flexibility. What is more expensive: working from home versus working from the office will vary from individual to individual - some may have an expensive or long commute, others may face increases they can't shoulder in electricity and heating bills if they home work - so giving staff the option to work from whichever location is more financially beneficial to them is one potentially straight forward way of helping employees save money.
For employers who are keen to maintain home working into the future, and who have consequently reduced their own costs in terms of office space etc, consider sharing that cost saving with your staff; think about offering a home working allowance to help staff meet increases in the utility bills they face from home working.
In this time of the so called "quiet resignation" some employers may be able to do the obvious and review salaries to ensure they remain fit for purpose and competitive. Alongside this, employers may want to review other relevant policies such as those covering maternity or other family friendly pay or sick pay. It is usually those who, for reasons beyond their own control, are unable to work that are most vulnerable to economic upheaval.
Particularly this winter, if affordable, employers can also look at one off payments aimed at those who are most affected by the cost of living crisis. A one off payment may have a greater impact than tweaking an overall package, particularly for lower earners.
Many businesses may simply not be able to increase rates of pay, but that doesn't mean they can't take other steps to assist their employees financially. The cost of facilitating discounts for employees to businesses local to their workplace, or vouchers from larger retailers can be quite low to employers at source - who are buying in bulk - but can make a big difference to a worker in practice.
Using the same principle, employers may be able to look at providing a lunch for staff once a week, or possibly fruit baskets or snacks. Period poverty is also something that employers can help alleviate by providing the necessary products free of charge to female staff. These measures have the dual purpose of encouraging workers back into the office, if that is the employer's preferred option, as well as saving employees money.
Providing free financial advice can make employees aware of benefits that they may have assumed they were not eligible for. Child benefit is available to middle income earners and the vast majority of people can claim tax-free childcare. This could be done via something like a lunch and learn session so provision of it need not be a significant or ongoing cost to the employer.
In some circumstances, and subject to ensuring employees take their full statutory minimum holiday entitlement, employers may be able to offer staff the option to sell any unused extra holiday that they had previously purchased.
Other ways of helping
Providing support is not just about the financial support employers give employees. It is also about recognising what a difficult time this is for people, so employers should consider offering and promoting any employee assistance programmes, access to counselling or any other initiatives to staff which support their physical and mental wellbeing.
A one size fits all approach is unlikely to be as successful as something that is designed for the particular business and specific workforce's needs. Thinking creatively about what can be done and consulting with staff to identify what is needed should help to provide as great a benefit as possible. It's also necessary to be mindful that some changes may disproportionately adversely impact on employees who work part-time or have caring responsibilities so always be mindful of any unintended consequences any changes bring.
Most of all, listen, your staff are best placed to tell you what they need; be a source of support during this difficult time and be rewarded with, hopefully, improved staff satisfaction and reduced turnover.
To hear Hayley's top 10 ways that employers can support their employees during the cost of living crisis listen to our podcast - Employee Wellbeing - How can employers help with the cost of living crisis?
If you'd like to speak with us, please contact a member of the Employment team.
The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers. Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.