Following rising inflation and the huge surge in energy and fuel prices towards the beginning of 2022, the cost of living has increased not only nationally, but globally.  Across the world, people are having to figure out how they are going to deal with energy bills that are, at times, more than double what they were before. Some are even struggling to get to work thanks to the cost of filling their car’s tank.

There’s No Quick Fix

The most obvious solution for when more money is going out is to ask for more money to come in. So, employees have been asking their employers to provide pay rises in line with inflation, which is expected to pass 7% in April 2022. While some employers have provided these pay raises to their staff, many are simply not able. After all, many of the costs affecting employees are affecting the businesses employing them, too.

This is in line with the warning from the governor of the Bank of England's warning that employees should not ask their employers for large pay raises, emphasising the larger pressure it will place on the country’s economy.

Financial and Mental Health

The link between a person’s financial situation and their mental health is undeniable. While money can’t buy happiness, it is very good at eliminating stressful problems – especially for those from lower-income backgrounds, whom these price increases are hitting hardest. A person’s mental wellbeing also has a clear link to their performance at work. The pandemic unsurprisingly saw a large increase in depression and anxiety, leading to a similar increase in absenteeism and poor performance. So, this cost of living increase isn’t just about a business’s staff morale, but its bottom line, too.

What Companies Can Do

It’s difficult not to see any additional spend on pay or wellbeing initiatives as an increase in overheads. This would be the case were it not for employee turnover, costing employers an average of £11,000 per employee. If just one employee decides to stay at your business as a result of a small pay raise or the implementation of a wellbeing initiative, the ROI is plain to see.

With that in mind, other than a pay increase, what is there for businesses to do?

Financial support doesn’t necessarily mean an increase in base pay. There are plenty of technological solutions out there to assist employees financially, if and when they need that assistance. This could take the form of interest free loans, travel allowances, financial advice, or any number of flexible benefits. This means the cost isn’t multiplied by every single employee in the business, but just the ones in need of support.

Further than this, employers can decide to focus on their employees’ mental health as well as their financial wellbeing by implementing systems that offer staff services such as counselling, mood tracking or CBT.

If the pandemic has proven anything, it’s that plenty of our work can be done remotely. Offering staff the option to work fully remotely will give them the chance to save on travel, without costing the business additional funds.

Conclusion

The truth is, there are plenty of options available to employers who want to help their staff deal with the cost of living crisis. While many of these options involve an initial spend, it’s clear to see that the return on investment will be well worth it. It’s also worth noting that many of these solutions involve a healthy dose of tech. At HR Technologies, we’re proud to work with so many incredible businesses in these spaces, whose mission is to make sure that every single employee is at their best physically, mentally and financially. Come along in May 2023 to meet them!