Supporting your employees with their financial wellbeing

It is well documented that the UK is experiencing a cost-of-living crisis as inflation rises with the Office of National Statistics (ONS) reporting that the Consumer Price Index (CPI) rose to 7.9% in May 2022. Each one of us is experiencing the impact of this through rising food costs, increased costs fuelling our vehicles and energy bills set to rise again in October.

But why should this matter to employers?

There is a clear and compelling moral case to supporting your workforce to achieve a decent standard of living as a responsible and good social sector employer. But research shows there is also a business case as money worries can affect the performance of our workforces. The Money and Pensions Service reports that financial stress causes 4.2 million days absence per year across the UK economy.

What can social sector employers do?

The latest CIPD Reward Management Survey, published in April 2022, reports that of the 280 responding organisations an overwhelming majority thought employers should:

  • provide a fair and liveable wage (96%)
  • support financial wellbeing by offering and signposting benefits and financial education (71%).

When it comes to fairness, any decisions made in respect of pay should be fair both in terms of an organisational process and when that process is used to determine individual pay decisions.

A “liveable wage” is typically one that enables your employees to meet the genuine cost of living. Looking at the 2021 National Living Wage (NLW) rates, the Centre for Research in Social Policy at Loughborough University determined that a full-time job, paid at NLW in 2021 earning £17,400 a year, did not guarantee an acceptable standard of living that we as a society consider everyone in the UK should be able to achieve. A single person needed to earn £20,400 a year to reach this standard, and a couple with two children needed to earn £34,200 between them, only achievable on the NLW if both parents worked full-time, which may not be possible without affordable childcare.

The NLW increased by 6.6% in April 2022, but this increase being below the current rate of inflation means that the gap between the NLW and a “liveable wage” has potentially grown. With high inflation predicted to last beyond 2022, many employers will be impacted and may not be able to offer at or above inflation pay increases.

So, what can employers do? If possible, seek to ensure your hourly rates of pay are high enough to cover the genuine cost of living. However, there are actions that employers can take to maximise pay and / or remove barriers to providing opportunities for work where it may not be possible to increase pay at or above current rates of inflation, this includes:

  • Providing more flexible working options, allowing greater access to work for those who may not be able to work full-time or at specific locations etc
  • Wherever possible provide more predictable hours of work for workers
  • Giving reasonable notice of any shifts where possible
  • Ensuring that any casual or bank workers are given genuine choice and flexibility, so workers can decline shifts without fear of future work being withheld
  • If affordable, provide an occupational sick pay scheme, which pays over and above Statutory Sick Pay (SSP) rate when eligible workers are off sick
  • Set up “swap shops” that allow your workforce to swap items they no longer want or need e.g., clothes or furniture.

It will also be helpful to provide financial wellbeing support and guidance to your workforce. If you currently provide an Employee Assistance Programme (EAP) you may find that this scheme can already provide your workforce with guidance on managing their finances and / or debts.

Whether you currently offer an EAP or not, you can find support and guidance from the Money and Pensions service including their toolkit to help employers talk about money within their workplace. You can also signpost your workforce to Money Helper, which provides access to support and guidance for individuals in managing their money including tools to help with budgeting.

Any queries?

If you have any queries about providing a fair and liveable wage or providing guidance in respect of financial wellbeing, please do contact us on 01562 840060 or via info@rootshr.org.uk

If you have any other suggestions on how to provide financial wellbeing support to your social sector workforce, we’d love to hear them, leave a comment below!

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