Four ways to alleviate your workforce's money worries this winter
Author: Hannah Copeland, HR Business Partner at WorkNest
As people’s bills increase, so does the pressure on employers to offer some form of support.
Taking steps to support people’s financial wellbeing benefits your organisation just as much as it does your employees. One study, for example, found that 5% of people have taken time off work due to money worries, and 35% believe financial concerns are preventing them from performing their best at work.
With this in mind, here are some ways to alleviate your workforce’s money worries.
1. Review your benefits
Employee needs have changed. As such, a benefits package that worked a decade ago might not cut it today.
Have you asked employees what benefits they value most? Have you looked at which benefits are used most/never used? Have you designed your benefits package around offerings with ‘real’ value, or are you doing something tokenistic?
It might be that all you need is a refresh of what’s already available to employees. Do you have a health cash plan which covers things such as doctor’s appointments and dental work? If so, remind employees what’s covered and what money they could save.
2. One-off payments or hardship loans
A one-off payment is where an employer pays an amount of money to an employee with no obligation to pay it back. Hardship loans are payments made with the requirement that the money is paid back over a while through deductions from pay.
While popular, we recommend exercising caution around these sorts of solutions. According to the CIPD, the issue isn’t that pay growth is weak; prices are running even higher.
Therefore, whilst a one-off gesture might temporarily solve an employee’s financial deficit, will it sustain a healthy and self-managing improvement in their cost of living and quality of life? We would suggest not.
There are also questions of how much you pay, how often you pay and do all employees get it or just those on lower salaries. This opens up questions about fairness, and there may be legal pitfalls.
Remember, as an employer, it’s not necessarily your job to provide financial help, but more so to spot the signs that employees may be struggling and steer them towards support.
3. Pay benchmarking and progression
With the cost of living, increase comes an influx of requests for pay rises, and it’s vital that employers can make evidence-based decisions.
Pay benchmarking is an excellent way to determine whether you are paying a competitive rate for your job roles and, when you get a request for a pay rise, decide whether you are willing to consider it.
If you decide against giving a pay rise, encourage employees to think about their next career step instead. So, while it might be a no right now, position your reply in a way which enables the employee to understand what needs to happen for them to move up to the next job level and how, with your support, they can learn and gain the skills to do so.
4. Cost-neutral initiatives
With the UK also experiencing a cost of doing business crisis, you may need to pay higher salaries or supplement wages. However, other cost-neutral ways exist to put money back into people’s pockets and help household budgets stretch further.
- Home/hybrid working to lessen or eliminate commuting and before/after-school costs
- Flexible hours to allow staff to cut their travel spending and capitalise on off-peak rates
- Free meals or a ‘community pantry’ where staff can donate and pick up essentials
- An internal advert board to promote skills and services employees can offer each other
- Covering any work-related costs or reimbursing employees more quickly
Consider ways to help employees that benefit your organisation too. Could you:
- Maximise existing incentive and commission schemes
- Pay for introductions for new hires, if you don’t already
- Pay for cross-referrals or business leads which turn into revenue
- Allow employees to sell some annual leave to gain some extra cash
- Suggest that employees cash in on a share save scheme
Above all, open the conversation. According to our poll, 60% of employers still haven’t spoken to their employees about the cost of living crisis. With 37% of employers saying they have received grievances from employees who feel underpaid due to salary inflation, doing nothing could be a costly mistake.