A Thinking Business Publication
As the inflationary effects of rising energy prices start to bite and everyone begins to feel the impact of the rising cost of living, employers cognisant of a hot labour market and their growing responsibilities within it are under pressure to do more to support staff.
We all know that being a successful employer of the future requires organisations to be innovative and adaptable in addressing their people’s needs, whether those relate to wellbeing, social responsibility, agile working or financial health. Many employers are currently prioritising helping staff through the hard economic climate, but that support can be much more than financial.
Nicola Ihnatowicz, a partner in the employment department at Trowers & Hamlins, says: “Helping employees with their financial wellbeing, and supporting them through the cost of living crisis, often goes beyond simply paying them more money. Financial wellbeing is one of the key pillars of being a responsible employer, and lots of people are also worrying about the mental health of their staff as they deal with this.”
Business owners are facing their own pressures in this period of rising input costs, but many are nevertheless planning to pay unconsolidated bonus payments over the winter to help. Giving wage increases may not always be an option but other ideas might include providing subsidised hot meals at work or running salary sacrifice schemes to help with childcare, cycle to work programmes or additional pension contributions.
Ihnatowicz says: “We are seeing a number of organisations in a variety of sectors setting up or extending loan schemes for employees who are suffering from particular hardship. That might be to help with an unexpected one-off payment, like the boiler breaking down, or it may be more sustained support to those employees most in need of financial help, protecting them from having to go to pay-day lenders.”
There are legal issues that employers will run into when they start offering employee loans, as these can be subject to consumer credit law. Offering one-off bonuses to help alleviate financial pressures can also have an impact on universal credit or tax credits, which employers will need to keep in mind.
A key element of any financial support package will be a proper financial wellbeing policy, signposting staff to where they can get help if they need it. Some employee assistance schemes provide financial advice, while other initiatives might include engaging with staff on things like money saving hacks.
Where people are working can have a big impact on their finances, so there may once again be reason to revisit flexible working policies. Imogen Reseigh, a managing associate specialising in employment law at Trowers, says: “Lots of employers operating hybrid models are now considering opening up their offices more broadly so that people can come into the office more frequently if commuting for them is more affordable than paying the energy costs associated with working from home.”
She adds: “On the other hand, if making people come into the office two or three days a week is causing them hardship, employers might consider relaxing their hybrid policy by allowing people to work from home more to save on the cost of travel.”
At a recent Trowers Tuesday event discussing financial wellbeing with clients, one in four employers in attendance said they had introduced new measures to support staff with the cost of living crisis. A similar proportion said they had seen rising food and energy costs affecting their employees’ willingness to come to the office, with 7 per cent saying staff were more likely to come to the office, and 17 per cent saying they were more likely to stay at home.
Employers also need to recognise the increased strain that financial concerns place on people’s mental health, which means staff might be experiencing stress and anxiety, or existing mental health conditions may be exacerbated. Ihnatowicz says: “Covid has already pushed many people to a position where their mental health is precarious, so employers might consider having mental health first aiders in their teams and making other resources available and well signposted.”
Again, employee assistance programmes may step up here, with many offering counselling services, but it is important staff know what’s available and work in a culture that removes stigma and barriers from accessing those support networks. Physical wellbeing may also become a concern for some staff who are unable to heat their homes or cook proper meals, and employers will have both a responsibility and a business interest in keeping employees well.
Finally, some employers might need to consider their approach to staff working second jobs. Ihnatowicz says: “There are Working Time Directive issues if you know your employees are taking on second jobs to make ends meet. Employers still need to take reasonable steps to make sure people are not exceeding 48 hours work a week, with appropriate rest breaks.”
She adds: “Clearly there is a limit to what you can do, because you can’t really stop your people taking on evening shifts in supermarkets or driving taxis. But you can ask reasonable questions and take steps to make sure they are not overdoing it.”
Whatever support mechanisms are put in place, it is important that employers are seen to act fairly and are aware of discrimination risks. “You need to make sure that whatever measures you put in place are not inadvertently discriminating against particular groups and that decisions are consistent,” says Reseigh. “You might also think about front line versus office staff, to ensure whatever is put in place is properly communicated and you are supporting everyone .”
Making sure that staff feel content and well cared for, and that they can raise issues and get support when required, is all part of being a responsible employer. While times are difficult for everyone, those that step up with meaningful help for their people will be the ones to benefit long term.
