Cost Of Living Crisis: The Role Of Financial Wellbeing In The Workplace
As the UK’s cost of living crisis comes sharply into focus, employers are increasingly needing to support their employees’ financial wellbeing. By offering the right employee benefits and value-add services like Employee Assistance Programmes – which routinely include financial counselling and support services – companies can demonstrate just how much they value their staff.
[Related reading: Employee Benefits Key To Addressing The Great Resignation]
Many Struggling To Cope Amid Soaring Cost Of Living
New figures reveal UK consumers have started cutting back on their food and utilities spending in the face of growing living costs. According to the latest data from the Office for National Statistics (ONS), up to 83% of UK adults saw an increase in their cost of living this month, up from 62% in November. As a result, 34% of these people say they have cut back on their gas and electricity use at home, while 31% said they were spending less on food. Half say they have cut back on non-essentials.
Meanwhile, separate research from the Chartered Institute of Personnel and Development (CIPD) shows one in eight employees say their pay is not enough to cover acceptable living costs and they have to go into debt to pay their bills.
With rising inflation and energy bills, employees face a cost of living squeeze that sees many of them simply unable to make ends meet. Indeed, the CIPD research also found that 27% of those polled by YouGov would not be able to cope with a £300 emergency bill without having to dip into their savings.
The Role Of Financial Wellbeing In The Workplace
Employers need to appreciate that they stand to directly benefit from supporting their employees’ financial wellbeing. For example, when asked how money problems impact them, 28% of employees polled said it has an impact on their work performance. This rises to 34% for those earning less than £20,000. Almost one in five (19%) say they have lost sleep as a result of money worries.
The CIPD research also reveals that an opportunity exists for employers to do more. Around a fifth (19%) of employees say their employer does not do enough to support their financial wellbeing. One in 10 say they do not think that their job protects them from falling into poverty.
Yet, organisations that offer financial wellbeing policies are viewed more favourably in their employees’ eyes. For example, 60% of workers at organisations with financial wellbeing policies say their employer does enough to support their financial wellbeing. This compares to just 28% at organisations that do not have a policy in place.
Furthermore, a full 81% of employees whose organisations currently offer financial wellbeing policies say it is important that any future employer also has this benefit in place.
Charles Cotton, the CIPD's senior reward and performance adviser, said: "While the government is best placed to provide immediate support for people affected by the cost-of-living crisis, our research shows there are opportunities for employers to do much more to support the longer-term financial wellbeing of their people".
[Related reading: Financial Wellbeing At Work: Time To Review Your Benefits Package?]
Offering a financial wellbeing in the workplace policy is not only the right thing for employers to do morally, it can also help organisations stand out in a tight labour market. Contact us today to find out how you can start offering the right employee benefits and show your staff just how much you care.