Top tips for retaining and keeping employees engaged during the cost of living squeeze
With one in four people worried about how they’re going to pay their bills over the next six months and more than one in three looking to reducing spend on basic essentials such as food, it’s clear that employees are starting to struggle to make ends meet.
Despite warnings about the inflationary impact of salary increases, it’s only natural that employees struggling financially are going to be looking to their employer for financial help. And with unfilled jobs at an all-time high, there’s the real risk that employees start looking for alternative jobs with better pay.
Double whammy for employers
For those employees that don’t look to move on, there’s the problem of reduced productivity levels and absenteeism. A recent CIPD report shows that employees in high financial stress groups on average are absent for 6.2 full-time equivalent days and, according to a similar study by the Centre for Economics and Business Research, that equates to 4.2 million lost working days across the UK – at a cost of £626 million in lost output.
The bottom line is there’s a bit of a double whammy for employers, the risk of losing skilled workers and the negative impact of financial stress on the remaining workforce which ultimately affects the bottom line.
Other than pay increases or a one-off cost of living ‘bonus’ payment – both of which are only going to alleviate some of the pressure rather than solve the bigger problem, what else can employers do without increasing company costs?
In a nutshell, focus on making disposable income go further.
Tip 1 – salary exchange
Despite a general cull by the Treasury a few years ago, this is still a real no brainer for pension contributions and it is surprising how many employers don’t take advantage of this gift from the government.
For someone earning £30,000 this could mean an extra £192 disposable income – it’s free money being left on the table. And for the employer, there’s a potential saving of more than £200 which could either be kept or paid into accessible savings to give employees a helping hand in becoming more financially resilient.
It’s an old concept but with a lot of benefits and it’s not difficult to implement.
Tip 2 – pension redirect
This is the newest, but perhaps most interesting tool in the employee benefits box. It recognises that while saving for retirement is really important, employees are dealing with conflicting priorities like financial pressures today versus financial needs in 20 or 30 years’ time.
It can be a difficult balancing act, but it doesn’t have to be a conflict.
Pension redirect allows employees the choice to have some of theirs and/or the employer’s pension contributions (over and above auto enrolment minimums) paid into an accessible savings product like a workplace ISA. The outcome is that employees can save for more short-term concerns while still saving for the longer term. It’s a win-win and again easy to implement.
It can help avoid the worst-case scenario of employees reducing their contributions or opting out of the pension altogether.
These are just two options available to employers to help employees tackle the stresses of rising living costs. Both can really help employees feel supported and neither increase the costs to the employer.
To find out more, take a look at our latest white paper.
In partnership with Cushon
Cushon is an online savings&investments platform provider, offering holistic workplace savings.