The UK’s cost-of-living crisis has been biting hard, and for many businesses and individuals, it’s bound to mean some challenging months ahead.
With 79% of employees saying their employer has an obligation to support them through the tough financial period, the pressure is on for HR to explore what they can do to help.
Why should the cost-of-living crisis be a priority for HR?
HR’s unique position within a business means striking an important balance. Not only must they take on responsibility for employee wellbeing, but they must also act in line with the financial limitations communicated by senior staff; a difficult position to be in amid the current financial climate.
To make matters even more complex, employees’ priorities are shifting to prepare for the oncoming recession: where an outstanding company culture may have previously been enough to retain top talent, salary and job security are – understandably – taking the top spot once again.
Financial concerns could, in fact, quickly become a catalyst for deeper issues within a business. Apart from the most obvious risk of employees leaving for higher pay elsewhere, employers are already witnessing a surge in quiet quitting, disengagement, and damaged morale. And with one in four employees saying money worries have affected their ability to do their job, it may not be long before businesses’ output takes a hit, too.
For HR, then, the cost-of-living crisis – and any issues that may arise as a result – could be a crucial dictator of a company’s success over the coming months. This is the case not only for employee engagement and wellbeing, but also, importantly, for productivity and profit as well.
Now more than ever, therefore, it’s crucial that HR review support on a continuous basis. When making the difficult – albeit important – decision of how best to help, there are a few things to keep in mind…
When employees struggle, so does their workplace
If your organisation is in a position to offer financial support, you could find that it has a noticeable impact not only on your reputation, but also on your company’s culture, productivity, and employee loyalty long-term.
With financial pressures weighing down even the most enthusiastic of employees, dwindling engagement – whether on account of working while sick, poor mental health due to monetary issues, or simply a turn towards quiet quitting – will no doubt impact morale across a business. And if employers don’t act – with financial aid or otherwise – it could mean long-term reverberations on a company’s culture and reputation.
What’s more, failure to offer support could impact your recruitment efforts later down the line. With employer review sites like Glassdoor growing ever more popular, it’s all the more likely that dissatisfied employees will make their feelings known once they’re on their way out.
Do employers have a responsibility to provide staff with financial support?
With an uncertain few months ahead, several UK employers have opted to offer employees direct financial support, either through an immediate one-off lump sum to help stay afloat, or with the more long-term approach of increasing the salaries of their lowest paid workers.
In fact, the CIPD suggests employers hold a moral responsibility to support workers’ financial wellbeing and minimise the risk of in-work poverty within an organisation – with a fair, liveable wage marking the very first step.
Despite individual concerns, however, a looming recession within the existing financial crisis will no doubt see businesses suffer, too. On the tail end of a difficult two years, many industries are already struggling to stay financially viable – and so, additional costs (particularly if not met with a clear, immediate ROI) may be difficult to justify.
From HR’s perspective, this can mean a limited budget from directors looking to cut costs and save money, and an even trickier time getting additional support packages approved. If your business can’t afford to stay afloat, after all, redundancies and cutbacks will mean an even tougher time for everyone – however well-intended your approach.
If not with financial support, how can HR help?
The difficult truth is that, while most employers will see a moral drive to help staff through tough times, it simply may not be within the budget. So, if you’re struggling to get the sign-off on salary increases or a cost-of-living payment, what else can HR do?
- Review your benefits packages
Are your employee benefits as useful as they could be?
Taking the time to review existing benefits – and explore whether or not funds would be better spent elsewhere – could make a surprising difference in difficult times. If you’ve spotted that particular schemes, programmes, or discounts aren’t being put to use, it may be a sign that your benefits packages aren’t aligning with employee needs.
Getting employee feedback, such as through a pulse survey, is an efficient way to tackle this. By offering staff the chance to share what they’d like to see – whether that’s access to financial wellbeing checks or more tailored ‘money back’ schemes for the services they use most – HR can maximise the ‘benefits’ of employee benefit packages.
- Focus on building a supportive company culture
‘Money talk’ can be daunting but, given the widespread nature of current financial concerns, remains a necessity when it comes to offering support.
HR can broach the subject by signposting resources and ensuring that all employees – whether or not they’ve expressed a need for assistance – have the means to access help independently. Training for line managers – particularly around difficult conversations and managing anxiety – may also prove beneficial when it comes to opening up a dialogue around sensitive issues.
Also important to remember is that not all struggles are created equal. Research has consistently found younger employees to be disproportionately affected by poor financial wellbeing, while women are up to 33% more likely to experience financial stress than their male colleagues. With this in mind, approach concerns with empathy, and maintain an open mind when exploring what can be done to help.
- Support mental wellbeing in your workplace
In a similar vein, it’s crucial that HR remain conscious of the mental health impact of the cost-of-living crisis, and are prepared to handle mental wellbeing issues that may arise as a result.
Does your organisation have a designated mental health first aider, and if so, are all employees aware of their role? Are line managers taking preventative action to avoid burnout, such as regular check-ins and avoiding out-of-hours contact?
HR should take care not to underestimate the value that well-placed mental health support can offer employees in difficult financial times.
Above all else, HR should take the cost-of-living crisis as an opportunity to review existing employee wellbeing practices, lead with empathy, and prioritise feedback from staff who may be struggling.