Employers must offer greater financial wellbeing support to help staff achieve a decent standard of living, the CIPD has said, after finding that one in eight employees say their pay is not enough to cover acceptable living costs without having to go into debt to pay their bills.
As employees face a cost of living squeeze owing to rising inflation and energy bills, 19% say their employer is not doing enough to support their financial wellbeing, and 10% do not think that their job protects them from falling into poverty.
Twenty-seven per cent of those polled by YouGov say they would not be able to cope with a £300 emergency bill without having to use their savings, while only 47% feel they could save for their retirement on their current rate of pay.
Asked how money problems affect them, 28% say it has an impact on their work performance, rising to 34% earning less than £20,000, and 19% say they have lost sleep.
Financial wellbeing
Cost of living crisis: what can businesses do to help employees?
The CIPD said that offering employees greater support with their finances is not only the right thing to do as a responsible employer, but will also help organisations stand out in a tight labour market.
Charles Cotton, senior reward and performance adviser, said: “Even before the current cost-of-living crisis unfolded, work was failing to protect many people from poverty and failing to support good financial wellbeing in the way it should.
While the government is best placed to provide immediate support for people affected by the cost-of-living crisis, our research shows there are opportunities for employers to do much more to support the longer-term financial wellbeing of their people.
“The biggest difference an employer can make is to pay a fair and liveable wage. But even organisations who can’t afford to increase wages right now can support their workforce in other ways.”
Employees who are at an organisation with a financial wellbeing policy are far more likely to say their employer does enough to support their financial wellbeing (60% versus 28% who did not have a policy in place), and are more likely to say they are keeping up with all bill and credit card commitments without difficulty (70% versus 58%).
Eighty one per cent of employees covered by a financial wellbeing policy say it is important that any future employer also has this benefit in place.
They are also much more likely to say their employer offers a generous pension (64% versus 26%) and that their pay is enough to help them save for retirement (61% versus 41%).
As well as providing financial wellbeing support, the CIPD recommended that employers do more to support career progression to help employees increase their earning potential, and ensure they pay a “fair and liveable” wage.
The HR body has launched a hub in partnership with the Joseph Rowntree Foundation that offers financial wellbeing resources for employers.
Louise Woodruff, policy and partnership manager at Joseph Rowntree Foundation, said: “Work is a huge part of our lives, and employers have the power to make the difference between staff being on the edge financially, and offering them a firm foundation to be able to build a better life for themselves and their families.
“This isn’t just a question of paying people more, it’s also about policies and support that allow people to plan, to know what their income will be in advance, and to know how they would meet an unexpected cost.
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“Where employers can help their staff through the current pressures on their cost of living, they are likely to reap the benefits in terms of loyalty, retention, and a healthier, more content workforce, as well as helping to eliminate the huge injustice of in-work poverty.”
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