What’s causing the cost of living crisis in the UK?
The UK inflation rate has been rising at an alarming rate. With prices for food, energy and other goods and services soaring, the British economy has found itself to be in—as the Guardian puts it—”an almighty mess.”
While the Russia-Ukraine conflict is definitely a huge contributing factor, there are other reasons that contributed to this dire situation. The most prominent of which are COVID-19, an energy crisis, labour shortages and additional taxes on households.
With inflation hitting a 40-year high of 9.4%, the UK cost of living crisis is only getting worse. This has of course resulted in a fall in real income. The impact is being felt most by low income groups and those earning minimum wage. Economists at UBS Global Wealth Management believe 99% of British workers are unable to keep pace with the rising prices of food, energy and petrol.
According to a Totaljobs survey, 37% of workers across the country are considering a job change to match up to the rising living costs. On top of that, most employees are stressed at work, which is affecting their performance and productivity.
While the economy might take several months to get back on track, it’s a good opportunity for employers to review their benefits and well-being schemes. Here are four ways to ease the financial burden and burnout your employees are experiencing.
How can you help your employees through the cost of living crisis?
As an employer, you run the risk of a dissatisfied workforce if they are unable to get any support from their growing cost-of-living worries. Helping them on all fronts includes both financial and emotional support, and not just now, but always. Here are a few ways to extend support that goes beyond just lip service:
Revise your benefits package
While offering salary hikes to all employees may not be possible, you can review your current benefits scheme. Does it cover diverse needs or only the bare minimum? Can you arrange one-time bonuses or interest free loans? It’s a good idea to listen to employee suggestions and build a plan that works for everyone. A flexible benefits package is a great option as employee circumstances and needs may differ. Apart from easy access to medical support, you can also cover dental care, transport, mental health check ups, gym membership, classes and workshops and lunch costs. Employee Assistance Programmes (EAP), debt support, and discount schemes can work well looking at the rising rate of inflation.
Focus on mental health
High cost of living and financial insecurity can negatively impact employee mental health. Most people do not prefer talking about issues related to money and income openly. As an employer, you should take extra care to create an environment where employees are allowed to voice their concerns. It’s crucial to normalise conversations about salaries, mental health or its associated problems. Create a gentle, open culture where empathetic leaders are willing to listen and offer solutions to their employees. You can also have regular check-ins with staff, and offer free counselling or access to certified therapists.
Offer financial training and support
According to the Chartered Institute of Personnel Development, 57% employers actively focus on mental well-being but only 11% focus on financial well-being. Now more than ever, it’s vital to add financial education to your well-being strategy. These can mean helping employees budget and calculate their finances by sharing the right guides and tools.
This can also be in the form of online courses, workshops by experts or financial advisors who cover topics such as debt management, emergency funds and loans. One-on-one or group sessions can be held to offer personalised advice to employees.
Embrace remote working
There’s an upward tick in the demand for remote jobs in the UK. A Randstad study reveals that 9 out of 10 employees prefer to work from home so they can save up on soaring fuel prices and cost of living. In fact, 62% of the UK workforce is considering a move abroad to a place with a much lower cost of living. These are staggering numbers. There has never been a better time to accept remote working as a way of life.
With petrol prices at an all-time high, increased transport costs and expensive meals outdoors, a day at the office can turn out to be an expensive affair. Is your company policy remote-first or remote-friendly? Is there unsaid pressure on your employees to work from the office?
With the great resignation and the state of the economy, remote jobs in the UK is not just an option, but also a necessary measure. Companies are now also enabling their employees to temporarily work from abroad. A survey performed by HubbleHQ, a UK-based workspace management platform, shows 42% of the employees would want to use their company’s remote working policy to work from abroad.
As an employer, it’s crucial to extend support in more ways than one. Two things you can start doing right away are: listen to employee concerns and offer flexibility.
At WorkMotion, we specialise in all things remote work and global hiring. If you’d like to leverage the benefits of remote-first employment or build a global team, contact one of our specialists today.