Supporting employees through the cost-of-living crisis

Supporting employees through the cost-of-living crisis.

Many business leaders will be finding themselves looking out into the great unknown yet again, unaware of what the coming months will hold, as the cost-of-living crisis takes hold and the downturn in the economy seem to suggest impending recession

And for many, their first thought will be how to maintain and retain their workforce through the bumpy days ahead.

Recent research by Totaljobs found that over half of employees surveyed would like to see their employers supporting them as their bills soar.

And as they look to balance their incomings against their outgoings, there are sure to be increased calls for pay rises as rising costs impact their household budgets.

So, should employers be rushing to raise salaries? Not all companies will be able to afford to do so despite the obvious long term positive implications for employee retention. Others may be able to afford it but fear it may trigger a salary war so what is the answer?

Our experience shows us that pay rises are, perhaps surprisingly, not always the most appropriate course of action.

Ultimately, we have found that what ambitious employees want boils down to how it will benefit their careers long-term. Now, more than ever, employers should be communicating with their employees and prioritising discussions about their prospects and future opportunities with the company. Staff will  be reassured to know that their job role is heading in the right direction, and that their efforts are being recognised.

Remove the taboo

It’s time to talk money! There is still reluctance within society to engage in conversations about finances. The British stereotype of feeling awkward about talking about money, certainly has some truth to it – and even more so in a work environment, where there is often unease about the potential implications of raising the topic.

But if the pandemic has taught us anything, it’s that workplaces are now expected to provide a lot more than just a desk to sit at.

Practices and policies around employee mental health are now commonplace. But we know that wellbeing issues do not happen in isolation – they often make up just one part of a much wider picture of a person’s life and they can be triggered or exacerbated by money worries

Being concerned about paying for food may not be an employee’s primary or only worry but it is likely to make any others they may have much worse.

In our experience, just talking more about money can really help to ease stress in your professional and personal life. By making finances a normal part of a ‘checking-in’ conversation by a manager, or HR professional, we can help to normalise the subject and ensure that employees feel comfortable enough to raise concerns before they bubble over.

And, as always, there is an upside for you as an employer too. If a staff member is aware that they can speak candidly and that discussions around salaries are encouraged, then they are much more likely to speak to you, as their current employer, about a pay rise rather than jump ship for a better offer and present you with a fait accompli.

Be transparent

Much of the stress that employees suffered from during the pandemic, was due to uncertainty. And in times like this, employees will often turn to their leaders for a sense of stability. This can be extremely challenging to navigate, particularly when you yourself may not be clear on what is coming.

In these situations, it can be tempting to pretend that everything is fine when it isn’t to put minds at ease. But if you are facing adversity, it is far better to be honest where possible.

You of course want to avoid causing undue panic, but your employees are perceptive and if there are problems, they will probably have already picked up on them. Putting on a brave face may instead convince them that you are simply hiding the truth and could cause them to assume an exaggerated scale of the problem.

Showing your workforce  that your leadership team is aware of the approaching financial challenges and are putting steps in place to negate the impact on staff, will result in a stronger relationship of trust, and illustrate that employee needs are paramount to company decision making.

All of the above may help with the emotional and mental toll that crises like the cost of living can bring, but what about the financial side?

For employers who are considering providing salary support, they should carefully consider potential tax implications, such as how tax brackets might affect the amount you give.

For example, if a staff member is in the 20 per cent tax bracket, and an employer wanted to give an extra £100 to their pay, £125 would have to be given for net pay after tax is deducted to still amount to £100.

If you are unable to raise salaries, then there are other tax-free support routes that can be pursued. Trivial benefits for example, can be provided for an employee, without paying tax.

Certain rules apply such as costing £50 or less to provide, but this could take the form of a voucher, experience or social event. Whilst these small tokens of appreciation won’t cover your employee’s next energy bill, they could provide a much-needed boost by allowing them to buy something they need or want.

By having conversations with your workforce, asking for regular feedback and running staff surveys, worries about finances will hopefully come to light naturally. But there is no harm in being proactive and pre-empting problems before they arise, demonstrating your commitment to employee security and ultimately giving employees another reason to stick around.

With over 30 years of experience and expertise in the niche sector of IT Network and Security, we have unparalleled knowledge of the market. That’s how we can be confident in knowing that we can help you in meeting your hiring goals. Get in touch today: https://hamilton-barnes.com/