Have you noticed that your employees are more stressed, worn out or disengaged recently?
Well, According to the Daily Record, 48% of UK workers reported not having received a pay rise in the last year. And half of those that did only saw a 5% increase or less.
With the current rate of inflation at 10.1% – it’s no wonder employees are feeling the pinch. So many are deciding to change jobs because their wages just don’t match the rising cost of living.
In order to put food on the table and pay bills on time, something has to be done. But Lemonade Reward are making sure it’s not just up to the employees to battle through this economic crisis.
The more people understand money management and the more they are presented with opportunities to better their financial future – the more likely it is that businesses will see higher retention rates, motivated teams and positive company culture.
The Impact Of Wellbeing
Employees are becoming increasingly wary of costs and sensitive to anything that could impact their finances.
This means forfeiting hobbies, luxuries and entertainment for commuting costs and household bills. The exclusion of what have become ‘non-essentials’ is detrimental to the well-being and mental health of employees.
There is no real light at the end of the tunnel for most as nothing has been implemented in the way of pay rises or financial assistance.
Alongside this, many companies fail to offer well-being support and resources that could benefit the overall health of employees. As a result, people are becoming more and more run down – getting closer to burnout and mental crashes. This building stress affects the ability to concentrate on even the smallest of things – let alone strive for excellence at work.
Businesses should be offering financial well-being support as well as focusing on a fair and livable wage for all staff. This way, targeted benefits and open, honest conversations create a route to improving productivity and fulfilment in current roles.
Companies like Lemonade Reward offer advice to employees so they can build long-term strategies. Having this support through your business reassures employees that you are invested in their well-being both in and out of work.
It should not be a one-time thing, but an ongoing engagement with team members both individually and as a collective. This encourages open conversations, building a culture of trust and growth.
While the rising cost of living does not affect everyone in equal amounts, it is undeniable that a large majority are having to make changes because of it.
CIPHR’s research suggests that two in three people are overwhelmed with the current economic state, with 67% of people admitting they’ve already had to cut down on household spending.
Many of these individuals have also approached employers for more remote working opportunities to save on fuel or commuting costs while others have actively asked for advice and support.
If companies aren’t doing enough to help staff at times like these, people end up reaching burnout and the staff realise how underappreciated they are. More and more are on the lookout for roles with salaries that cover more than basic living costs and companies that offer better benefits packages, support and financial aid.
Another worrying result of these rising costs is that people are already forcing themselves to work more than one job or continue pushing through when they’re unwell just to avoid loss of income or even boost what they already have to provide beyond the rent.
Lower earners are at a particular disadvantage with statutory sick pay. Whereas, the availability of contractual or company pay would encourage (and allow) many more to put their health first without added stress.
As a result, you’re going to get more engaged, focused and positive staff working more efficiently. It’s in a company’s best interest to look after the people that keep the cogs turning.
An Employer’s Role In The Cost Of Living
A large number of employees complained that their wage no longer covers basic living costs. Without disposable income, many are not only feeling the financial strain but the impact on their mental health too.
The thought of stretching income to payday is just one nightmare amongst a web of anxiety and worry. If businesses don’t realize that their salaries do not compare with these rising costs, there are going to be more people looking elsewhere not only for higher income but because of burnout and lack of appreciation too.
People should not have to live pay check to pay check. And we understand that it’s a rough time for everybody – businesses included.
That’s why Lemonade Reward are ensuring companies know that salaries do not need to be the only factor in supporting your team.
For example, imagine your team can’t afford their train fare to work because prices have risen so much. Many are working remotely more often to mitigate the fuel and travel prices – but where that is not possible, it can prevent individuals from carrying out certain parts of their role.
But, businesses could offer free or discounted travel as part of their employee benefits package. Not only are you helping out your team financially, but you’re also encouraging them to come into the office – which is great for productivity levels and sociability.
Maintaining relationships within the organization encourages conversations and reminds people that they are not alone. It’s a small change that can make a big difference and show your employees that you care about their well-being both in and out of work.
If you want to show your employees that you are committed to their development, think about how the cost of living is affecting them and what you can do to help.
For example, many people are struggling to get on the property ladder or pay rent. This makes it difficult for staff to save money and plan for their future.
But, by offering financial education and development opportunities as part of a package deal, businesses can help equip their team with the knowledge they need to make better decisions about their money. This will have a positive impact not only on their work-life but also on their home life too.
It’s important to remember that the cost of living is not going anywhere anytime soon. And, as prices continue to rise, employees will need more support to stay afloat.
By offering benefits and resources that target the cost of living, employers can ensure that their staff are supported long-term (thus, improving fulfilment and appreciation – increasing employee retention rates.)
Many retirees today must consider the risk of inflation much more than previous generations. This is due to the Pension Freedoms, which were introduced in 2015 and changed how and when you can access your pension.
In previous years, there was a common way of retiring and creating an income. You would save into a pension during your work life and then purchase an annuity that would provide a guaranteed income throughout retirement.
This was often linked with inflation meaning that retirees would not have to worry about how their spending power would change long-term.
However, the new pension freedoms have given retirees much more choice about how they want to access their pension. This includes taking all of your pension as a cash lump sum or using income drawdown to take money from your pension pot as and when you need it.
Whilst this sounds great in theory, it does come with some risks at times like these.
One of these is that your finances could be eroded by inflation if you don’t carefully consider how you’re going to generate an income in retirement.
This is something that businesses should bear in mind when planning for employee retirement. It’s important to offer guidance and support so that staff can make the best decisions about their pensions and plan for a comfortable retirement.
Some younger employees may favour opting out of auto-enrolment to keep back their personal contributions in order to cover rising living costs now.
With the correct resources and proper education, sensible pension choices could actually benefit your employees long-term. Building financial resilience should be an essential part of any employee benefits package.
Prevention Over Cure
Taking action to reduce financial stress before it gets to breaking point is one thing employers can ensure they do now while staff are still navigating the rising costs.
Aside from the obvious financial benefits, there are plenty of other reasons to consider offering cost-of-living support to employees.
It can help with staff retention, motivation and morale. And, in turn, this can lead to improved productivity and a more positive work environment.
So, if you’re not already doing something to help your employees, it’s time to create an open culture and set an example.
Scrap company meals out or team social activities that cost money and replace them with something you can organize internally. Whether it be an extra day off or taking part in a fun run together – set the example that money doesn’t have to be spent to take time away from work and socialize with colleagues or family.
It’s also important to have regular check-ins with employees. This can help identify any early signs of financial stress and give you the opportunity to offer support.
By being proactive and taking steps to prevent financial problems, businesses can save themselves a lot of time and money in the long run. Lemonade Reward have helped numerous companies educate and support employees, so don’t forget that professional advice is an option too. Especially with the impact being so great – it’s a crucial thing to get right.
The rising cost of living is also not something that is going to go away anytime soon. So, now is the time for businesses to start doing something about it. ]
From offering pay rises in line with inflation right through to pointing employees in the direction of an advisor, there are plenty of things you can do to help your team cope with the cost of living.