As the cost of living continues to rise and inflation approaches double figures, employers have a more important role to play than ever in supporting the financial wellbeing of their employees.
The CIPD recently hosted an event in Northern Ireland on financial wellbeing for people professionals. We were heartened by the number of employers who joined us to understand what they can do to support their people.
Even before the rising cost of living started to make the headlines, one in eight workers in the UK was already living in poverty. Now with costs of energy, food and petrol soaring, many more families are struggling to maintain a decent standard of living.
One in five workers responding to a recent CIPD survey said that their employer isn’t doing enough to support their financial wellbeing, and three in ten said that money worries are having a negative impact on their ability to do their job, so it’s an issue that employers really have to get to grips with.
High Salaries versus Financial Wellbeing
However financial wellbeing isn’t necessarily about high salaries. New research from the Money & Pensions Service shows that people with high financial wellbeing were more satisfied with life than those in households with income over £50k per annum; proof that money alone does not necessarily buy happiness.
Financial wellbeing is about feeling secure, confident and in control of your money.
Supporting employees with their financial wellbeing is an integral part of creating a healthy workplace where people can flourish, reach their potential, and make a significant contribution to their organisation’s performance.
Employers who demonstrate their commitment to supporting financial wellbeing should have a more committed and productive workforce.
Even if you can’t afford to offer inflation-busting pay rises, you can do your bit by having a simple financial wellbeing policy and signposting your employees to where and how to get help.
How to help
So, what can employers do to help their people achieve a decent standard of living?
No matter what size the organisation, all employers can play their part by putting a financial wellbeing policy in place, covering three key aspects of HR practice.
Pay a fair and liveable wage
A liveable wage enables people to live a dignified life and meet their cost of living.
With inflation at its highest levels for four decades and fast-approaching double figures, paying your employees a real Living Wage, based on the cost of living, has never been more important. The Living Wage Foundation currently calculates this at £9.90 per hour across the UK, apart from London.
However it’s not just about the rate of pay – hours are also important. Employers should remove the barriers that are preventing many people from working the hours necessary to meet their financial needs.
Employers should also consider giving reasonable notice of shifts so people are able to work them. The CIPD is calling for a seven-day minimum notice period for hourly paid workers, and fully compensating people when their shifts are cancelled with less than 24 hours notice.
Support in-work progression
Help your employees to maximise their earning potential by supporting them to develop the skills they need to take on higher-paid roles.
Employers should also ensure that their staff have career progression paths, and access to targeted training and development opportunities so they can fulfil their potential.
Consider using mentoring, shadowing and work experience to expose people to a variety of different roles and opportunities throughout the organisation.
Investing in your people also improves staff retention, loyalty and engagement, so it really is a win-win.
Provide financial wellbeing support
The Joseph Rowntree Foundation suggests that wellbeing support should be targeted in four key areas – housing and utilities, child and elder care, travel, and food and leisure.
There’s so much that employers can do in these areas – from providing subsidies and loans, flexible working and subsidised childcare, to paying travel expenses, offering cycle to work schemes, free and subsidised meals in work, shopping and lifestyle vouchers and much more.
By offering a range of employee benefits that help incomes go further, as well as signposting relevant financial advice and guidance, employers can make a big difference to people’s lives.
Encouragingly, CIPD research shows that many employers now offer occupational sick pay, crisis loans to deal with unexpected financial shocks and the option to choose how often they’re paid, which can help people to manage their money.
It’s also important to create a safe place for your employees to talk about money worries. The earlier that people ask for help, the easier it is to assist.
Money Helper
Margaret McCloskey, NI Partnership Manger at the Money & Pensions Service joined the CIPD’s financial wellbeing event to explain how MaPS can support organisations to build their financial wellbeing strategy.
Organisations should consider signposting employees to Money Helper, a free online, phone or face-to-face service which offers impartial advice on everything from banking and budgeting to benefits, pensions and dealing with money troubles.
You can watch a recording of the CIPD Northern Ireland financial wellbeing event here on YouTube.
Visit the CIPD’s in-work poverty hub. In conjunction with the Joseph Rowntree Foundation to understand how you can help to make work a more reliable route out of poverty.
Susan Hayman, Memberships, Networks and Communities Manager
The CIPD in Scotland and Northern Ireland