How companies can help their employees during the cost-of-living crunch
July 27, 2023
The cost-of-living crisis has been a major challenge for businesses in the UK. Rising inflation is making it harder for employees to make ends meet, and this is leading to increased turnover, with many calling it the ‘great resignation’ period. In order to retain and attract key talent, employers have had to take different approaches and steps to help their employees cope with this crisis.
There have been and continue to be several things that companies are doing to support their employees during this difficult time. Here are some of the initiatives we have seen to be working:
- Offering competitive salaries and benefits – this is probably expected, however last year we have seen the highest average pay increase in a very long time for both executives and the rest of the workforce. In addition to base salaries, companies have started offering a variety of financial benefits as well as benefits that support wellbeing and work-life balance over and above their standard and existing benefits.
- Evaluating salaries – companies are benchmarking salaries on an ongoing basis to provide evidence-based approaches to their employees to continue building trust and understanding.
- Offering financial assistance – some companies have provided financial assistance to their employees in forms of one-off bonuses, loans and salary advances as a way to help their employees.
- Offering discounts – some companies have offered discounts to their employees on products and services such as childcare, gym memberships and travel. This has helped employees to save money on essential expenses.
- Companies have also allocated more budget for salary increases focusing on the lowest paid employees, making off-cycle adjustments and bringing forward pay reviews.
Some companies have adopted these inflation-related initiatives as part of their reward plans. However, every organisation is different and the decision whether to implement a policy or not will depend on the company’s culture, economic situation, how its industry is performing and what employees are potentially asking for.
Having said that, not investing in the workforce and reviewing their pay as they deal with the cost-of-living crisis could have negative outcomes. Currently, it is noted that three in four workers in the UK are considering changing jobs due to the rising costs, so an increase in pay also increases the retention rate.
Companies need to find a balance between what is do-able and what is practicable for business continuity.
It is important for companies to communicate with their employees to build understanding, to clarify the business strategy and the affordability of their plans, if the company has a culture of transparency.
A sound remuneration policy is not just about base salary. It is therefore important for companies to reiterate the total remuneration package they offer to the employees, as opposed to employees only focusing on their salaries. This can be done by providing total reward statements to employees in order to help them better understand how all the elements of their remuneration support their day to day lives.
At MM&K we have seen the challenges faced by businesses during the cost-of-living crisis. However, we have also seen how companies have adapted and survived in this environment. By considering some of the suggestions outlined in this article, companies can show their employees that they care about their well-being and that they are committed to assist them through this difficult period.
We can help you and your company should you need any assistance or have any questions about anything in this article. Please do not hesitate to contact Yolanda Roach.