Four ways to support workers through the cost-of-living squeeze
After hitting the highest level since the 1980s, the UK’s annual inflation rate is on the way down. This, paired with energy costs finally declining, has raised hopes that the worst of the cost of living crisis will be left in 2022.
Unfortunately, for millions of people, the path ahead is far from clear. Inflation may be falling, but the cost of living remains impossibly high. Research from Joseph Rowntree Foundation shows that 22% of UK households were already living in vulnerable financial circumstances at the end last year, and with prices predicted to rise higher than wages in 2023, living standards will continue to be squeezed.
If there’s one positive result of the Covid-19 pandemic, it’s that employers were made acutely aware of the intrinsic link between people’s personal lives and their performance, demeanour and enjoyment of work. The cost of living crisis has consequently seen firms of all sizes doing their utmost to support staff, whether via pay rises, one-off bonuses or access to external support.
While this is a step in the right direction, Wagestrem’s State of Financial Wellbeing: Cost of Living Crisis Report found a concerning disconnect between what employers say they’re doing and what employees say they’re receiving. More than three-quarters (80%) of firms say they have introduced new support, but just 19% of employees are aware of these initiatives and more than half want their employer to provide more support.
So how can employers overcome this disconnect and take action to support people during this time?
1. Never stop communicating
Firstly, firms need to be relentless in communicating support. Choosing the correct channel for this is key. While email is easy it is also easy to ignore. Additionally, there will be significant cohorts with limited access to email, and those who work part-time may receive emails at different times, meaning they won’t be able to join spontaneous conversations which often turn emails into action.
Before communicating your financial wellbeing initiatives, look at all the channels you have for internal communications test and each channel at different times and with varying messages, so you can learn which channels best reach your staff and are most effective at generating engagement.
2. Tackle money stigma
Taking action against money stigma in the workplace is vital. There’s no silver bullet, but sharing accessible stories, increasing support and raising awareness will go a long way.
Important here is the choice of language. Using polarising language like ‘bad with money’ reinforces the idea that people have an unchangeable relationship with money and are defined by their current situation. We’ve made progress in mental health, as it’s more understood that referring to things as ‘nuts’ or ‘insane’ reinforces stereotypes and makes it less likely for people to speak openly – we must now do the same with money.
3. Introduce money champions
Peer-to-peer support with money is highly effective, as money stigma makes it less likely that employees will discuss their financial situation with an employer.
Money champions are not there to advise employees, but to increase the chances of a conversation and signpost their peers towards support. Some of our clients at Wagestream have seen great success from encouraging staff to act as money champions, as they reach their colleagues in a language and format which can be hard to replicate with top-down communication.
4. Encourage positive habits
Mounting evidence shows that savings are not only fundamental to financial wellbeing, but that being forced to use savings to make ends meet correlates with worsening life quality. With this in mind, employers should empower staff to become better savers – and it’s important to get the messaging around this right.
While most people generally understand why it’s important to save, they may not understand the link between savings and long-term financial wellbeing. So, rather than trying to convince people why it’s important to save, you need to help them find a motivation to save. Sharing stories of how saving has helped people achieve their aims can be powerful here.
Overall, while there is a clear role for the government to continue to provide cost of living support, employers must also do what they can to help the financial wellbeing of their staff. With low unemployment and the highest level of vacancies on record, it is not only the right thing to do, it also makes business sense.
In partnership with Wagestream
Wagestream’s financial wellbeing platform makes work more rewarding for 3 million people.
