Research into how employers are reacting to the challenges of the cost-of-living crisis and the impact it is having on their employees has shown that 52% of organisations have put measures in place to help staff.
Results from a survey by XpertHR suggest that helping employees’ with the cost of living is weighing heavily on the minds of business leaders.
With pay awards plateauing at around 5%, approximately half the rate of inflation, its data showed that nearly half (48%) of directors have set pay awards higher than originally planned as they try to attract and retain top talent and compete with higher offers from other companies.
Half (52%) of directors said they felt compelled to pay higher salaries to help employees keep up with the rising cost of living. Initially, this money came largely from reducing office space to reduce overheads (42% of organisations), spending less on technology and innovation (40%) as well as organic business expansion (68%).
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However, 63% of directors admitted that with operational costs on the rise as employees come into the office more, salary increases are not always going to be possible in the current market.
XpertHR also found that 73% of organisations are putting financial wellbeing support in place to help staff.
Scott Walker, managing director of XpertHR, said: “With pay increases still falling behind rising inflation, employers are having to look for other ways to help staff tackle the cost-of-living crisis.
“Unsurprisingly, financial wellbeing advice leads the way, helping individuals understand the options available to them and how to look after their money.”
“For many, the money they have left once all their monthly bills is paid is diminishing. To support these individuals, we are seeing increasing numbers of employers getting creative with the support they can offer, including granting repayable loans and non-repayable lump-sum payments as well as discount vouchers to reduce their employees’ monthly outgoings.”
Of those offering help, 56% have granted members of staff a lump sum or bonus payment to help manage rising costs. Amounts of £500, £750, and £1,000 were cited by several organisations, though these were typically reserved for employees with salaries under £40,000 per year.
As these payments are not consolidated into salaries, this targeted approach can help employees without employers having to carry the additional cost on an ongoing basis. Meanwhile, 25% of employers have opted to offer staff an interest-free loan.
“Even during these tough times, it is still possible to support staff and build a strong employee experience,” said Walker. “Benefits like employee assistance programmes can go a long way in demonstrating support, while other offerings like flexible working and training can also contribute to retention, making employees feel trusted, valued, and invested in.”
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The research also found that 53% are conducting regular benchmarking of pay rates, half (51%) are providing access to an employee discounts provider, 49% are offering employees flexible work locations and patterns, and 31% are offering better benefits and incentives.
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