The rising cost of living is negatively impacting the financial wellbeing of your team – and therefore your organisation. Delaying action is not an option, so what should you be doing now to support your staff through the cost-of-living crisis?
Focus on savings and re-building financial resilience
In Wagestream's recent State of Financial Wellbeing report, 50% of UK employees said they wanted their employer to better support them to save money in 2022 – ahead of anything else. Despite this clear preference just 18% of employers plan to do so.
The pandemic significantly affected the savings of UK workers. A 45% rise in negative life events throughout 2020, predominantly income shocks such as reduced hours and furlough, meant employees were increasingly forced to raid savings for daily living expenses. Even pre-pandemic, 50% of UK households didn’t have enough saved to cover an unexpected bill of £100.
What should employers do? Focus on the how. Most people intrinsically understand why they need to save, but it’s the gap between knowledge and action that’s difficult to bridge. Some workplace savings programmes make it as easy as possible to save something every pay cycle, for example.
Spin up a cost-of-living money signposting service quickly
It’s hard to talk about money and this puts line managers and other internal stakeholders off starting a conversation. But it’s important to note the role of the organisation is not to solve problems but to signpost employees to the right services and tools so they can help themselves.
Employees in crisis may think their situation futile, so an easy first step is simply to provide a list of resources that employees can draw upon depending on their unique financial situation. This can be posted centrally or locally or given to line managers to cascade down to their teams.
A more advanced option is to provide financial coaching, which provides a much more personalised signposting service along with accountability for behavioural change, which is important to improving long-term financial wellbeing.