Any employer can begin to create a financial wellbeing policy with minimum additional financial costs, Helena Newberry, Employee Relations Adviser at Napthens People Projects Team explains.
In the UK, we have been fortunate to experience decades of low inflation, and consequently a relatively stable cost of living. However, as a result of various factors, whether that be COVID, Brexit, uncertainty, war, or all of the above, one thing we can all agree, the rising cost of living is something that has an impact on all of our pockets. With this rising increase in costs, coupled with the increase in NI set to come in from April 2022, now is the time that many employees will be asking for pay increases.
In an ideal world, pay would increase in line with inflation. However, at the rate of inflation at present, this just isn’t a sustainable or practical option for many businesses. This is especially true for SMEs when we consider that a majority of these businesses have been hit hard with multiple lockdowns throughout the COVID-19 pandemic and the health and social care sector has been one of the most affected for numerous reasons.
Whilst raising pay may just not be an option available to some employers, that does not mean that they can’t do anything to help their employees. Instead of focussing solely on pay, employers can consider what alternative strategies can be introduced within the company to help mitigate this rising cost of living, including financial wellbeing.
One way which employers can help staff members during this time is to introduce a salary sacrifice scheme. There are various different schemes of this, one of the most popular being “cycle to work”. The introduction of the cycle to work scheme has the benefit of tax and NI contributions, whilst increasing the activity level of staff and lowering the cost of the commute. This can have the effect of improving both the financial and mental wellbeing of employees.
Employers can also consider the introduction of a holiday sell back scheme (if the contractual holidays which employees are entitled to, is over the statutory minimum). A good work-life balance is always crucial for any employee, however if employees have holidays remaining it would allow them to convert the unused holidays into pay. This may also be a benefit to employers who are struggling the plug the gap caused by recruitment challenges in the care industry. Please note, employment law advice should be sought if creating a policy on such a scheme.
As we transition into new ways of working from the recovery from the pandemic, business can create an encouraging environment where staff feel valued by noticing their hard work. ‘team member of the month’ schemes, suggestion boxes, regular team meetings and team building activities can be inexpensive ways to integrate the wellbeing strategy into the daily work of management.
Building on this as a further low-cost strategy could be the introduction of an Employee Assistance Program (EAP). These tools are relatively low cost per employee and would enable the employee to get advice on a wide breadth of topics. EAP is intended to help employees deal with personal problems that might adversely impact their work performance, health and wellbeing. Financial worries due to the increase in living costs can in turn, impact the mental health of staff and as such, these tackle everything from mental health counselling services to financial advice. The use of the EAP will be unknown to the employer as it all remains confidential, but employees will have peace of mind knowing they can access these without any additional cost to themselves, due to the support by the employer.
Any employer can begin to create a financial wellbeing policy with minimum additional financial cost with the below simple steps:
- Let your workforce know that they can get free, confidential, and independent money and debt advice from the government’s Money and Pensions Service.
- Signpost staff members to loyalty schemes to get money back on shopping etc. Encouraging them to look at credits and using services such as Credit Karma/Totally Money to assess whether they have the best credit cards etc. We do this commonly for our car/house insurance but forget about banking.
- Make sure your workforce is fully aware of all the benefits you already offer and how to make the most of them. Ensuring these benefits are being used will certainly help with financial wellbeing. Companies can run themed days throughout the year, linking to one of the benefits that they offer to encourage usage.
- Begin a dialogue with employees and line managers about the financial challenges and opportunities faced by them and the business. This will show your concern and help to break down the stigma associated with money problems.
In conclusion, investing in your people though these times does not always have to be fiscally. Supporting their wellbeing will help to ensure you have a happy, motivated and productive workforce.
You can also read the blogpost by Napthens below that outlines the new National Living Wage rates