Research suggests that four out of five people are already affected by the cost of living crisis. As employers you have a duty of care for your employees, but should that extend to helping them deal with the cost of living crisis? In many cases, some employees are struggling to afford to travel to work. If you’re running an SME then increasing wages isn’t always a feasible option. So what can you do to help staff with the cost of living crisis?
1. Offer financial well-being support
Stigma still exists around debt and many struggle to ask for help. Employers should also create a culture of support, where staff are able to talk about their concerns. The CIPD advises creating a financial well-being plan in three steps:
- Let staff know about the government’s Money and Pensions Service which provides free, confidential, and independent money and debt advice.
- Communicate company benefits to the staff so that they are aware of what’s available to them.
- Communicate with employees and line managers about the financial challenges and opportunities they may be facing. This will help to break down the stigma.
The next step is to expand the policy and commit to paying a fair and livable wage, supporting in-work progression, expanding any benefits packages, and offering financial education. We also partner with Wellness Cloud, which provides wellness support for staff (and comes as part of our HR plans for clients). Read our guide to supporting your employees’ financial wellbeing.
2. Reduce staff travel where possible
With soaring petrol prices, many are concerned about affording to be able to travel to work and meetings. If employees have to travel for meetings, can they meet more than one person during the day so that the meetings are condensed into a day which will save you on the number of expenses incurred.
Another option is to introduce travel loans for staff to cover (however we would always recommend putting in place a loan agreement, get in touch with us for more detail). Some train/bus operators also offer discounts for season tickets so employees could check they are getting the best value when they travel.
3. Look at your workspace
Where do staff want to work? What is best for your business? Consider using staff surveys to understand whether staff would like to be in the office or a combination. For some small businesses, a good option is to look at scaling down and sharing office space. This means that they can retain space when they need it, but eliminate the large overheads of renting space that may be empty for a large proportion of the time.
4. If you do need to make salary increases, use a benchmark calculator
This will ensure you are not paying above or below the market rates and keep you in line with competitors.
5. Find alternatives to salary increases
At Bespoke HR we have given staff supermarket vouchers each month from now until the end of the year to help with the cost of living. As small business owners, we know that pay increases are not sustainable so we felt this was a good way to help employees who appreciated it.
6. Set up flexible benefits or an Employee Assistance Programme
Employee Assistance Programmes can also assist staff with a range of support from counselling to legal and advice on what to do if they are struggling financially. Read our guide to setting up a flexible benefits scheme.
7. Look at salary sacrifice options
Following the rise in National Insurance contributions in April 2022 the average worker has seen take-home pay fall as a result. Salary sacrifice allows employees to access benefits before being taxed. Staff can exchange part of their salary for non-cash benefits (these include childcare vouchers or cycle-to-work schemes).
8. Make sure your payroll is efficient
Getting paid on time (and accurately) is essential for any employee. To minimise stress and anxiety make sure your payroll process is efficient. A YouGov study found that one in five UK workers stated anxiety over poor communication around pay prompts them to think about looking for a new job. Common mistakes to avoid when it comes to payroll include:
- Updating tax codes / using the wrong codes: encourage employees to check Gov gateway to ensure they are on the right tax code.
- Calculating partial months and daily rates: mistakes can often be made here with staff being under or overpaid.
- Make sure additional deductions are not taxed: such as expenses that are not subject to tax and NI.
- Make payslips available in time for payday so that staff have something to reference.
Other useful resources to help staff with the cost of living
- The BBC has put together a timeline of key dates and events to be aware of.
- MoneySavingExpert has a calculator to help work out how much the energy cap increase will mean for households. It also has advice for those struggling to pay energy bills.
- Citizens Advice has guidance for anyone struggling with the cost of living.
Get in touch if you would like more advice.