New research suggests that the continuing cost-of-living crisis is now affecting a greater proportion of employees, with more people working extra hours, more struggling to buy food or pay their bills, and fewer being able to afford to take sick days, compared to mid-2022.

The poll* of  1,000 employees across the UK looked at their experiences of rising living costs in 2023, and any actions they’ve taken, or have considered taking, because of financial pressures.

The results highlight the significant impact that months of record inflation and soaring prices for (nearly) everything, especially essentials like food, energy, and housing, has had on personal finances and people’s wellbeing – causing most employees to experience stress (76% of those surveyed), lose sleep (52%), and reduce their household spending (79%).

One in six (17%) has made further ‘savings’ by cutting back (or cancelling) their personal insurance cover, such as income protection, life insurance, and medical or dental insurance, and one in seven (14%) has reduced their pension contributions – decisions which may prove to have costly consequences in the future.

Faced with declining real incomes and mounting expenses, almost half (46%) of respondents have taken on additional hours at work, one in five (19%) now has a second job for extra income, and one in three (34%) has been actively job hunting for a higher salaried role.

Thousands have turned to their employers for more cost-of-living support, with around a third (36%) of surveyed men and a quarter (26%) of surveyed women having recently requested a pay rise.

A further one in five of all respondents (22% of men and 17% of women) has asked for a promotion; one in eight (16% of men and 11% of women) has asked for extra employee benefits to help their wages go further; and one in ten (14% of men and 7% of women) has asked for a ‘one-off’ cost-of-living payment or bonus. (There is no way of knowing how many of these pay-related requests were successful, but given the notable gender ‘ask gap’ in these figures it’s reasonable to infer that more men than women may have benefitted from asking.)

Reducing monthly outgoings and increasing earnings only goes so far, though. For many employees, it’s still not been quite enough to make ends meet this year. Worryingly, over two-fifths (43%) of those surveyed have struggled to buy food or pay their bills. While fear of losing wages saw one in two (55% of surveyed women and 47% of surveyed men) work through illness because they couldn’t afford to take the time off at home to recover (it’s even higher for low-wage workers).

Nearly two-thirds (61%) of individuals earning under £30,000, compared to two-fifths (43%) of those earning over £45,000, report attending work when they were feeling unwell. For employees entitled to company or contractual sick pay, it’s often triggered from the first day of sick leave. Those that work at organisations that only pay in line with statutory sick pay (SSP) rules, however, must be off work sick for three days unpaid before they qualify to receive it.

In-person workers employed in retail and hospitality, are, at least statistically, the most likely to attend work when they are unwell (81% and 78% of workplace-based employees in these industries, respectively, admit to carrying on working while ill because they couldn’t afford not to). This compares to 64% of all in-person workers surveyed, and 38% of all remote and hybrid workers surveyed.

This is the second time the Cost of living survey has been run. Comparative analysis of both sets of findings (from May 2022 and June 2023) has revealed a marked increase in employees that have been negatively impacted, in some way, by the worsening cost-of-living crisis.

Of the 1,006 UK employees surveyed in 2022, less than a third (31%) were working extra hours or shifts at work. A year later that’s soared to almost half (46%) – an increase of 15 percentage points. The proportion of people working through illness has also risen 6 percentage points – from 46% to 52%. As has the number of households struggling with the cost of food and spiralling bills – up from 37% to 43%.

How employees are being affected by the rising cost of living in 2023, compared to 2022:

• 76% of those surveyed have felt stressed or overwhelmed about rising living costs (up from 75% of those surveyed in 2022)
• 52% have lost sleep over money worries (down from 55%)
• 26% have taken time off work because of stress (not asked in 2022)
• 79% have cut household spending (up from 67%)
• 43% have struggled to pay bills or buy food (up from 37%)
• 52% have attended work when unwell to avoid losing wages (up from 46%)
• 31% have asked for a pay rise (up from 21%)
• 46% have taken on more hours or extra shifts at work (up from 31%)
• 34% have started actively job hunting (27% were ‘considering changing employers’ in 2022)

Commenting on the results, Claire Williams, chief people officer at Ciphr, says: “Unfortunately, as these findings show, we’re still very much in the grip of an incredibly challenging cost-of-living crisis. I’m sure most employers are acutely aware of the continuing impact that rising living costs are having on their employees – and many will have already responded through increased pay or bonuses, and with wellbeing support or extra benefits.

“For many people, increases to their living costs doesn’t only mean a reduction in their disposable income, but it also affects their ability to keep on top of bills, pay for childcare, fill up the car with petrol, put the heating on, pay the rent or mortgage, or buy food. This can cause a huge amount of stress and anxiety, which can in turn impact health and wellbeing.

“It is concerning to see that more and more employees are feeling compelled to work when they may not be well enough to do so, due to the financial impact of taking time off. Some of these workers may not be entitled to statutory sick pay under the current SSP system, while others simply can’t afford to live on the current rates of SSP pay, or wait the qualifying time to get it. It’s something that’s in urgent need of reform, and employers may need to consider the moral stance they want to take on this, as part of their wider social responsibility.”

Williams adds: “Employers do have a tricky balancing act to achieve. They may already be seeing staff turnover increase as employees seek work elsewhere for more money, as well as their own running costs rising.

“There are, however, lots of steps that employers can take to help ease the financial impact on their employees, especially when salary increases to match record inflation aren’t a viable option.

“Start by fully exploring all the features of your existing employee benefits, as lots of these include partner products such as discount shopping sites and cash-back allowances. It’s also worth investigating benefits that have a low-cost impact to employers but that can help employees spread costs through loans for technology purchases, travel tickets, bikes, and even cars. Engage with your benefits providers to see if they can offer financial wellbeing seminars to your employees and do some research to share helpful tips and information from the wealth of online resources that are available.

“Above all, employers need to be mindful that everyone’s situation is different. Not everyone is being affected by the same financial pressures equally, and not everyone is coping with the stress of this situation in the same way.”

Poll from Ciphr

https://www.ciphr.com/cost-of-living-survey-results.