Soaring household bills, grocery costs, mortgage repayments and rent rises are having a significant impact on employees’ financial and mental wellbeing. As non-essential spending continues to slip down our list of priorities, the upcoming festive season may not prove as festive as we’d hoped. This is where employers and HR teams can step in to ease cost-of-living challenges. 

Investment in employee financial and mental wellbeing is vital to help them through this crisis and retain talent — especially important when 20% of employees looking for a new job state that their employer not caring about their wellbeing is a reason for looking elsewhere. The holidays are an opportunity for employers to show their teams how much they are valued and give them the support they need through the festive season and beyond. 

Fortunately, employers can help bring joy in what could be a difficult Christmas for many. With the right tools and resources, HR teams can provide meaningful support to employees at a time when our finances are more squeezed than ever, and our emotional wellbeing may be suffering. 

Feeling the effects of the cost-of-living crisis
Both employees and employers are feeling the effects of the tough economic climate. As we approach the festive season, employees, who on average spend 29% more in December, are having to rethink their plans. The cost-of-living crisis is affecting our wellbeing, with 16% of people feeling cut off socially by cutbacks, 15% feeling anxious and at risk and 17% feeling drained and desperate, facing severe cutbacks and significant physical and mental challenges. With our financial and mental wellbeing intertwined, Christmas signifies a daunting time for many employees. 

As for employers, they are under increased pressure to provide increased financial and wellbeing support despite squeezed budgets. HR teams are dealing with increased turnover, an already overwhelming workload with stretched resources, and a need to retain talent in turbulent times. Currently, a quarter of employees rate their company’s financial wellbeing support as poor and half state that they are not offered any at all. Ultimately,​​ relieving the financial burden on employees reduces their mental burden of money worries, creating a happier and more productive workforce. 

Discounts are not just a luxury
When employers look to improve their financial wellbeing offering, they often turn to discounts as a quick, easy win. Although discounts on luxury high-ticket items are important in the run-up to Christmas, offering more accessible and ‘useful’ employee discounts is vital for financial relief. This means discounts on everyday spending on things like groceries, family days out and clothes — savings on all the essentials that employees need. This approach works to unify the workforce and create a level playing field. ​​Everyone has access to the same benefits and can find the right fit for their individual needs, allowing employees to reduce the daily stress and financial pressures that affect them most. 

For employers, discounts represent a low-cost, high-impact benefit. It’s a more affordable option for employers than salary increases but gives a similar, or better, return for employees. For example, giving each employee a £50 net salary increase a month gives them an extra £600 a year. However, with a discount programme, each employee could save £1,149 a year, giving a much greater financial benefit. 

Boost employees’ financial IQ
With less disposable income and the cost of goods spiralling, many employees will be unable to spend as usual over the festive season. To help fill the gap and afford high-ticket items, many turn to high-interest borrowing. This can cause more harm than good and further increase employees’ money worries.  

Clearly, discounts are only part of the puzzle. Employers need to help build the overall financial IQ of staff to add an extra layer of economic security. Offering benefits like SmartTech — where employees can buy white goods and the latest tech, paying it off in instalments deducted from their monthly salaries — reduces the need to go to costly payday loans to support the household.  

Other ways to support employees can be as simple as providing links to free money advice sites or creating a hub for all the health and financial wellbeing information they need in one place. Going one step further, organisations can even set up sessions with internal experts, like the CFO or other finance leaders, to advise employees on their financial health and the benefits provided by the company. It’s all about offering employees the advice and tools they need to save and borrow wisely, helping them make smart financial choices in tough times. 

Celebrating your workforce on a budget
Benefits don’t always have to cost the Earth. During the festive season, ensure that gifts are personalised to what employees truly want. Not only does this reduce the wasted cost of unwanted items like the dreaded spare Christmas pudding in a corporate hamper, but makes employees feel more valued by choosing gifts such as days off that are minimal cost, maximum reward. 

Recognition is also a powerful tool to engage employees, giving a much-needed morale boost in tough times. This could be personalised content celebrating unsung heroes or giving to the givers who have sent the most recognitions throughout the year. With over 80% of people experiencing loneliness at work, even simply reaching out to employees and checking in goes a long way. The festive season is the perfect time to reconnect and celebrate wins from the year. 

In tough economic times, employers need to be there for their teams financially and emotionally. The relationship between mental and financial wellbeing has never been so evident, and it’s up to employers to relieve the burden on employees. Whether it’s through discounts, boosting employees’ financial IQ, or personalising rewards and recognition, it’s time for employers to step up and support their workforce through the cost-of-living crisis, Christmas and beyond.