As the winter months approach, the cost-of-living crisis is significantly impacting households across the UK. A sense of financial anxiety among the population reached its peak in July 2022, when consumer inflation rose to 10.1%, a figure the likes of which has not been experienced since 1982.
As a result of these grim reports, people are looking to a wide range of sources for support. HR plays a pivotal role in supporting the wellbeing of workers through these tough times. As businesses are also likely to be experiencing financial difficulties in the current economic climate, the time is now to consider a path through that has the best interests of both employees and the wider business in mind.
Review existing financial wellbeing propositions
Beyond paying a fair wage, employers have a responsibility to help their employees manage financial anxiety. Financial wellbeing is about more than being able to pay the bills at the end of each month; it also includes feeling in control of cashflow, having measures to confront any unexpected costs, and being on track to a healthy financial future. Employers can make a huge difference to the lives of their employees outside of the workplace by taking a few simple steps to review their existing approaches to financial wellbeing.
A quick and easy first approach would be to evaluate the extent to which internal communication channels are already being utilised to communicate about financial wellbeing. Open discussion about financial issues is an important step in reducing the taboo around the topic. Businesses can consider offering talks on money management, or even simply directing employees towards resources that may help them with this, such as MoneyHelper or Citizen’s Advice. Such an approach provides stability to employees by improving overall wellbeing and also drives employee engagement – benefitting the organisation at the same time.
Think about offering flexible benefits
Organisations may already carry out benefits reviews on a regular basis, ensuring that their proposition offers the best value for both employees and the business. For organisations that don’t have this regular cadence of updates in their HR strategy, and those who haven’t made any changes since the cost-of-living crisis has become acute, it may be time to refresh the strategy and consider flexible benefits.
Flexible benefits arrangements allow employees to choose a package that best suits their needs. Most schemes of this kind allow staff to either retain their existing salary whilst changing the mix of benefits they receive or reduce their salary to take on more benefits. As with any benefits scheme, there are a range of different flexible benefits for businesses to consider. For instance, commuting loan schemes allow employees to buy an annual season pass and pay monthly through their salary, rather than paying the full year up front. Commuting loans help instantly reduce monthly outgoings and make finances much more manageable. Similarly, schemes like workplace ISAs and financial planning can help employees build their long-term finances.
Flexible benefits arrangements can be more cost-effective for the business, as it means that organisations aren’t investing in benefits that employees don’t use. It also, of course, supports the employee in a way that makes financial sense for their individual circumstances.
Consider investing in payroll technologies
Crucially, employees cannot afford to experience delays or discrepancies in their wages at the end of a pay cycle. Employers have a duty to ensure that every member of staff is paid accurately and on time, especially during moments of economic difficulty.
For businesses that have not yet outsourced their payroll, now could be the time to make this step. Payroll software supports HR and payroll teams to manage, maintain, and automate payments to their employees all in one place – cutting out the need for spreadsheets and manual data entry. Managing payroll in this way ensures greater levels of accuracy and accountability, with automation reducing the likelihood of human error, as well as increasing efficiencies.
Create a culture of financial security
There are a range of steps to be taken by employers to ensure that their workforce has a healthy approach to their finances through economic difficulty and beyond. These steps both reinforce and are reinforced by each other – for example, accurate, outsourced payroll is bolstered by financial education through internal communication tools. Living and working through an economic downturn can be difficult, but when businesses act to protect their employees, the benefits are widespread for staff and organisations alike.