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Employee cost-of-living woes are being underestimated

New research highlights a gap between UK workers and employers regarding financial support amid the cost of living crisis. While HR leaders prioritise mental wellbeing, employees seek financial assistance. Despite efforts, the lack of designated financial support leaves many feeling underserved, risking increased turnover. Reward and recognition programs offer a solution but are underutilised. Nebel Crowhurst emphasises the importance of accessible financial wellbeing rewards in meeting employees’ diverse needs.

Just 40% of UK workers say their organisation is supporting them through the cost-of-living crisis, with figures as low as 28% for frontline workers, according to new research.*

Employers misunderstand the financial struggles of UK workers, according to the data. Whilst just 5% of HR leaders say employees’ financial wellbeing has significantly declined in the last two years, almost three times as many (13%) workers said this was true for them.

As a result, more HR leaders say that mental wellbeing should be a top priority in 2024 than financial wellbeing (60% and 55% respectively). However, employees rank them the other way around (60% and 65% respectively). It’s no wonder that less than half (45%) of employees feel that their interests are being represented by HR in the boardroom.

Employers falling short of workers’ financial needs

HR leaders want to help; over half (57%) say supporting employees with the rising cost of living has increased in importance over the last few years. However, they are struggling to meet the demands of employees, who rate pay rises (62%) and financial bonuses (53%) as the top two ways to make them feel more appreciated in the workplace. But almost two thirds (64%) of HR leaders say it is challenging to offer competitive pay and benefits.

A tiny 14% of HR leaders say that their organisation specifically offers financial support to counter the cost-of-living crisis as part of its reward and recognition programme, despite three times that number (43%) saying in general that they believe their organisation is helping employees through it. The data suggests that employees feel this lack of designated support, with a huge two in three (65%) saying their organisation could do more to support them through the cost-of-living crisis.

Companies that can’t satisfy their employees’ financial woes risk resignations: employee turnover has increased over the past year, coinciding with over a third (36%) of employees considering leaving their job because of poor pay, by far the most cited reason.

Reward and recognition is a solution, but it’s currently underrated

The research shows that a miscommunication of the value of reward and recognition programmes could be hampering HR teams’ attempts to address these financial woes. Less than half (49%) of workers believed their employer has a reward and recognition programme, despite two thirds (65%) of HR leaders claiming that they do.

Even when employees have awareness of these initiatives, which are designed to offer incentives, awards, recognition and rewards for performance and contributions, and while 70% say they have a good knowledge of the programme, less than half (47%) say the level of reward and recognition offered is good.

It’s no wonder employees don’t recognise the value of these programmes, when only 43% of HR leaders say theirs is well funded, and the vast majority (82%) say they believe their rewards and recognition offering needs to be better.

Nebel Crowhurst, Chief People Officer at Reward Gateway, said: As the cost-of-living crisis continues, many employers have a genuine desire to help workers feel financially supported. However, when a company’s economic situation doesn’t allow for pay rises, employers often feel there is nothing they can do.

“This is far from the truth; good reward and recognition programmes can relieve financial stress for both employer and employee, when they are made visible and accessible to all.

“With over two thirds (67%) of HR leaders being asked to do more with less, offering personalised, easily accessible, impactful financial wellbeing rewards will go a long way towards meeting complex and varied employee needs at this difficult time.”

Research from Reward Gateway

HR Priority Report.

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