Benefits strategy: the need for a more proactive approach
The pandemic forced the world to slow down, to stay at home, to re-evaluate their routines.
It wasn’t easy for everyone, especially those juggling working and schooling from home and, of course, those directly or indirectly impacted by illness.
For many it gave them an opportunity to reevaluate their lives, ambitions and career aspirations.
The working landscape has changed and, while some organisations are encouraging a return to the office, many have embraced hybrid, remote and flexible working, according to research by Pluxee.
With the next generation of workers now demanding flexibility, this new, post-pandemic outlook places businesses in the best position to attract and retain their talent in the future.
What, then, of the cost-of-living crisis? What can we say has changed for the better?
Taking action
When the cost-of-living crisis first hit, UK employers responded en masse. Towards the end of 2022, headlines spoke of stories about the number of businesses offering cost-of-living bonuses.
The Chartered Institute of Personnel and Development (CIPD) found that raising wages was the most common early response to the cost-of-living crisis, with 41% of larger firms taking this stance.
Increasing wages has drawbacks, however, especially during a volatile economic climate when the cost of doing business is also high.
Upping wages can add millions to a company’s wage bill and, for some employees, it could change their tax bracket, meaning they don’t receive the full benefit of the increase.
Sustainability is another matter. Not all businesses can withstand cost-of-living wage increases in the long term.
From reactive to proactive
When it became clear that the cost-of-living crisis would have a lasting impact, UK employers sought more proactive, resilience-boosting, and sustainable steps to supporting employee financial wellbeing.
One such move was to review the effectiveness of their benefits strategy.
REBA’s 2024 Employee Wellbeing Research Paper found that 46% of UK employers plan to continue to provide targeted financial support for the cost-of-living crisis.
What does this support look like?
Pluxee UK’s 2024 Money Mastery research reveals that 48% of its employee respondents rated their financial wellbeing as average, poor, or very poor.
Financial wellbeing doesn’t just refer to money in the bank. It encompasses financial awareness and education, debt and savings. These are the elements that determine financial resilience.
Pluxee’s research also found that HR professionals are eager to provide support, with 75% saying employers should do more to enhance financial wellbeing.
Steps to resilience
Benefits strategy is moving beyond cash savings and financial perks to include education, budget management, planning for the future, and debt consolidation.
Financial wellbeing strategies are becoming holistic to help employees become financially resilient rather than just stretching salaries further.
Wage brackets and circumstances differ and, within an organisation, there’ll be people thriving alongside those struggling to make ends meet.
A holistic and inclusive financial benefits strategy can support employees at all levels and stages of life.
Spotlight on mental wellbeing
The cost-of-living crisis has impacted the nation’s mental health, according to the Money and Pension Service, with financial anxiety costing UK businesses £120bn and 17.5m lost work hours.
Financial wellbeing benefits that reduce the cost of living and help employees manage debt will help with money worries.
For some, that’s not enough. Mental ill health is the dominant cause of long-term sickness absence – another hit to UK employers.
REBA’s 2024 Employee Wellbeing Research Paper reports that 96% of employers plan to or already offer an employee assistance programme to support employee mental wellbeing.
This proactive and sustainable approach to giving employees the mental and financial support needed to be their best, thus saving businesses in the long term, has been more prevalent since the cost-of-living crisis.
This strategy can only be good for staff and businesses alike.
In partnership with Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
