27 September 2022
5 ways to support your employees’ financial wellbeing during the cost-of-living crisis
The cost-of-living crisis has already seen 83% of people impacted by the rising costs of food, energy, and petrol.
The stress and worry about making ends meet are understandably distracting, and can seriously impact the productivity, motivation, and engagement of your employees. All this can add to already pressing retention issues if your people think higher pay or job security is available elsewhere.
Whilst providing your employees with a pay rise may be everyone's first thought to the solution, this approach requires significant planning and comes at a high cost to implement at an organisation-wide level. Not always easy when the cost of running a business is increasing too.
5 ways to support your employees
Below, we have highlighted 5 key things you can do as an employer to enhance your employee experience and employees' financial wellbeing.
By adopting the below points, as well as being beneficial to your employees, you will be recognised for wellbeing and become an employer of choice.
1. Let your employees access their pay before pay day
Heard of earned wage access? It is often described as “instant pay”, or “on-demand” pay. Officially, its government term is Employer Salary Access Scheme (ESAS). ESAS payroll schemes allow employees to access their wages as soon as they have earned them.
How does this benefit your employees? 10 million people reportedly struggle to keep up with paying their household bills. With the cost-of-living crisis we could see a rise in this.
Unexpected bills and changes in living situations happen every day. Help employees avoid payday loans or taking out additional credit cards to cover unexpected costs. These methods make it more difficult for individuals to save and inevitably have an impact on an employee's financial wellbeing. The stress can build up and employers usually see the knock-on effect on their employees work quality and output.
ESAS schemes provide an interest-free alternative that ends the increasing debt cycle. You can choose the level of flexibility and control to align with your organisation too.
2. Provide real-time pay information
A real-time payroll engine runs a continuous calculation. This means that any changes to an employee's payroll record are visible immediately, without having to wait until the end of a pay period.
This more accurate and frequent data means an employee's payslip can be updated with any changes made, in real-time. Employees have greater visibility of what they are earning, as they earn it – improving their financial decisions and financial wellbeing by improving their budgeting and ability to save.
Real-time payroll also supports your payroll team. It empowers them by freeing up time which has previously been used dealing with payroll enquiries so they can focus on more strategic tasks.
3. Review your benefits and rewards
Employee rewards and benefits can be a key factor in improving employee financial wellbeing during this cost-of-living crisis. By putting together a benefit and rewards package based on what your employees value, it can help make salaries go further each month. If you can offer these as a salary-sacrifice scheme to reduce the tax bill, it will help them go even further.
There is an array of optional benefits that can make an impact when it comes to an employee’s financial wellbeing.
Generous annual leave policies
Access to special discounts at the gym, home entertainment or supermarkets
Mental and physical health insurance
Assistance paying off debt
Vouchers for expenses like transport and childcare
4. Offer greater flexibility around working hours and location
By offering flexible hours, it can help reduce costs such as childcare and also avoid your employees travelling at peak times. Flexibility with location can help employees save money on commuting costs altogether.
On the other hand, employees may favour working in the office to avoid paying additional energy costs as those bills continue to increase. By offering your employees flexibility, you can let your employees choose what is best financially for them as one size never fits all.
This can benefit your organisation, as this flexibility contributes to both the financial and emotional wellbeing of your employees. Expect to see more productivity from your employees allowing them within reason, to choose where and when they work.
5. Offer a financial coach as an employee benefit
Employees may have good intentions to be financially healthy, but when it comes to planning or knowing what to do, lack of knowledge may be a barrier to their success.
Naturally, financial wellbeing and financial health are connected. When someone has had to take on debt to make ends meet or have not invested wisely due to a lack of financial education, it can be difficult to know what to do next and the money worries grow.
Financial coaching can help employees create a plan for the future. It can support employees to feel more positive about money, work to remove self-destructive thought patterns and behaviours and help individuals reach financial goals to improve their financial health and wellbeing.
Most importantly, it shows that as an employer you care about your employees wellbeing, which in turn can aid retention.
Improve your employees financial wellbeing
As part of our series of wellbeing checklists, these actions and more are available to download now.