Part 1: How to navigate the cost-of-living crisis with your staff
With energy bills set to soar even higher, inflation at its highest in decades and salary increases not keeping up with the pace, the UK is seeing a record number of households face the biggest decline in incomes since the 70s. How can you as an employer help to navigate the cost-of-living crisis with your staff?
Since your organisation is only as strong as your workforce, now more than ever it’s important for staff to feel supported throughout ongoing economic hardship. The cost-of-living crisis is already affecting many people, and only set to get worse as winter draws in but there are a few cost-effective measures employers can take to keep their team, happy, healthy and stable.
Offering home and in office work options
Working from home has plenty of benefits: from saving time and money by removing the daily commute to increased wellbeing from working in the comfort of your own home. But with the recent cost of living crisis already an issue and threatening to get worse for many people, the benefits of home working are now being reassessed against excessive costs to heat homes over the coldest winter months. HR experts suggest that it has prompted 42% of UK workers to consider heading back to the office to save money during the cold, hard months looming ahead.
With the latest research from our own research poll, it seems that giving people the choice in the matter will help to ease the stress during the cost-of-living crisis and ensure your workforce is stable, despite the hardship.
Salary sacrifice schemes
Since National Insurance contributions rose in April 2022, the average worker’s take home pay has fallen by £250 each year. However, through smart salary sacrifice schemes employees may be able to minimise these losses by paying for some items before they are taxed.
Salary sacrifice schemes allow an employee to exchange part of their salary for extra benefits, such as childcare vouchers, a company car, purchasing a bicycle through the cycle to work scheme or as additional pension contributions. The result is that they’re able to use their salary to access these benefits before having paid any tax, meaning the tax and NI they do pay on their remaining salary is lower.
Schemes such as these can be a great way to help your employees ease the squeeze without adding any extras costs to your organisation.
Salary increases & real living wage
A recent survey by global workforce adviser Resource Solutions found that a third of workers had not had a pay rise within the past year and that women had fared worse than men when it came to the rise in the cost of living. With 37% of men having received a pay rise to help them adjust to rising costs, only 29% of women stated the same reason for a pay rise, if a rise was received at all.
While national minimum wage is mandatory, the real living wage is voluntary. Businesses that voluntarily opt into the real living wage scheme help to ensure their employees earn a wage that is enough to live on. Some organisations offer salary increases in line with or above inflation, helping to stabilise (or raise) employee’s wages in real terms.
If your organisation is highly dependent on its workforce, reviewing whether you are offering a real living wage to your staff will strengthen and stabilise your workforce during the turbulent times set to come.
For more information and guidance on how to support your staff during the cost-of-living crisis, contact our expert Hertfordshire based HR team >>
