Constantly having to think on your feet - reacting to events and ever-changing announcements and guidelines as they came - the last two years have been a stressful period for HR teams and employees alike. But the current and growing cost of living crisis that is now impacting so many of us could prove to be even more of a disruptor.
Soaring inflation started making headlines at the turn of the year, rising to 7% in the year to March. But it’s predicted to get a lot worse and last beyond 2022. This means UK businesses and employees are facing double-digit inflation for the first time in 40 years. A crashing combination of factors will be pinching employees financially, including:
- National Insurance rising by 1.25% from April 2022
- Sky-rocketing fuel prices with the largest monthly increases since records began
- Annual energy bills rising by around £700
- A Bank of England interest hike affecting mortgages
- Food price increases due to fuel prices and shortages
And a new report from Schroders Personal Wealth has found that over half of Britons are stressed about their financial situation:
'We also recognise that at the time of publishing this report the UK is experiencing 30-year high inflation rates, a rise in living costs and interest rates that are slowly increasing, the consequence of which is still to be felt on a national scale.'
(Source: This Is Money, April 2022)
This is posing a lot of questions for HR teams and you may be seeking some answers over the coming months. How will employers and employees react to the news? Will pay rises be able to match inflation? What will it mean for industries already grappling with strategies to attract and retain key talent? And what support is available for struggling employees?
Employee health and financial wellbeing
Just as employees face health challenges, they also face financial challenges and the two can exacerbate each other. Which can lead to increased stress levels and unhappiness, in turn impacting performance at work. And with only one in five people feeling as though they can discuss financial stress with their employer1, you may have many colleagues suffering in silence. A situation that if it persists increases the risk of mental health problems such as: anxiety and depression, substance use problems, sleep problems, and bodily complaints.
Staff will be seeking pay rises where possible but a one or two per cent pay rise will be eaten up quickly in the face of double-digit inflation numbers. Many employees will be evaluating their current employer with a critical eye and the other eye on what’s on offer from employers elsewhere. With lots of employees already chasing more flexible working conditions this will make recruiting people even more competitive.
It’s estimated that £1.56bn a year2 is the cost of financial stress to UK businesses due to lost productivity, absenteeism, and recruiting lost talent. So, if you’re looking to support employee retention within your workplace, taking steps to support financial wellbeing within your business makes good business sense.
Helping make healthier, happier employees
The cost of living crisis will make life difficult for a lot of people but it’s also an opportunity to build loyalty by showing employees you’re there for them. There are creative ways businesses can help employees offset rising living costs and make every pound count.
Salary sacrifices
Asking employees to give up part of their pay every month may sound counter-intuitive but it can make financial sense. Budgets can be boosted and costs off-set if the money is used on cycle-to-work schemes, electric vehicle leasing, or interest-free season ticket loans.
Provide what you can tax-free
For example, staff working from home may qualify for a small tax rebate due to basic costs such as broadband and home-office furniture.
Promote cash plan allowances
If your company doesn’t already provide this employee benefit, the time is now for a health cash plan. If your company already has a health cash plan, now is the time to promote it. These allow you to support both employee health and financial wellbeing, providing money back on health services such as physiotherapy and purchases such as glasses.
Offer retail and discount schemes
With the cost of food rising, having the ability to claim a discount off a weekly shopping bill can really help salaries go a little bit further. There are also usually special discounts available for branded clothes retailers or even for expensive purchases such as home furnishings where a small discount can add up to a significant sum of money saved.
Selling annual leave
Taking annual leave to rest and recharge produces reinvigorated employees on their return and should always be encouraged. But, if it's approaching the end of the annual leave period and people have unused holidays that they don’t really want to take, it could be a welcome option to be able to sell that leave back to the employer and see an increase in their wage that month.
Healthier, happier employees with a health cash plan
According to one report, around half of under 35-year-olds already say that financial pressures affect their behaviour at work and their ability to do their job3. When employees are struggling, it’s important to be able to provide them with the ability to speak up about how they’re feeling. One way to provide this kind of support is through an Employee Assistance Programme (EAP).
“Porterbrook have offered the Health Shield Cash Plan to staff since 2018. This is a well utilised benefit, as it also encompasses an EAP service and Perks platform. We also include the mental wellbeing app Thrive.”
HR Manager at Porterbrook
With a Health Shield Health Cash Plan not only do we support employee health with money back on everyday health costs but we’re also able to include an EAP service which is provided by our partner Health Assured. They have a fantastic finance team that your employees can access with a 24/7 helpline with any and all questions they might have. And they can help managers advise employees with industry-leading employee support by calling one of their wellbeing experts.
Employees may need a helping hand with their mental health if stress gets out of control. Our Health Cash Plans can also help take care of that. The NHS approved* Thrive app provides clinically proven digital self-care therapy at the touch of a button - and is included with every plan. And if employees need a bit of extra support they can talk to a counsellor 24/7 whenever they need to.
A Health Shield Health Cash Plan doesn’t only cut the cost of everyday healthcare so that salaries can go further. It also provides extra benefits including a rewards package - My PERKS. This is packed with discounts at a range of retailers and offers on memberships. Vouchers for grocery stores are available alongside big brand partners (from Adidas to Zalando), where offers of up to 35% off† are possible.
Health cash plans are growing in popularity as a valued employee benefit. If you're an employer, it makes good business sense to keep your employees in the best of health and show you care. A health cash plan can go a long way to help ease the cost and accessibility barriers many employees face when addressing their own everyday health concerns. This year, as the cost of living crisis hits households, it will be difficult for a lot of people but you can build loyalty by showing your employees you’re there for them through thick and thin.
The employee benefits revolution shows no sign of slowing down. Employees are looking to their employers to show that they value them and care for their health. You can protect your workforce by helping them access the healthcare they need whenever they need it. Let’s get in touch to see how we can help.
This is a financial promotion
Health Shield Friendly Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
* The app meets NHS quality standards for clinical effectiveness, safety, usability and accessibility and has a supportive evidence base.
† Offers are correct at the time of writing but may have expired since then.
Sources
This is a financial promotion.
Health Shield Friendly Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
