The surge in the cost of living is deeply impacting both workers and businesses, as the escalating prices of vital commodities and services add to financial strain and psychological stress.
A substantial 47 percent of UK employees revealed they have minimal to zero savings remaining by the close of each month. Furthermore, an additional 15 percent indicated their households encountered difficulties covering monthly expenses.
Numerous employers are taking proactive measures to assist employees amidst escalating costs. After a demanding two years contending with the Covid-19 pandemic, a silver lining emerged: an enhanced emphasis on employee benefits and their significance to the workforce during that difficult period.
With the cost-of-living crisis causing further issues for employees, there has never been a better time for companies to recommunicate their benefits offerings to assist staff through another increasingly uncertain and stressful time.
However, according to research, today’s benefits appeal mostly to the highly paid, but further research shows there is a strong business case to provide employee benefits that demonstrate diversity and inclusion.
I address some of the assumptions workplaces might make about employee wellbeing, why they are problematic, and how to provide support during the cost-of-living crisis.
Why does the cost-of-living crisis impact the workplace?
Nuffield Health’s 2023 Healthier Nation Index revealed 59 percent of individuals believed the cost of living or a change in personal finances had negatively impacted their mental health over the past year.
Mental health can be significantly impacted by financial worries, and without effective support, mental health conditions can affect a person’s confidence and identity at work. The ability to concentrate and work productively can decline, and businesses may report an increase in absenteeism and presenteeism among those struggling.
Another issue employers might face is staff taking up second jobs to meet their increased outgoings. Research shows 5.2 million workers have taken on an additional position to help pay for the increased cost of living, and another 10 million plan to, in response to rising costs.
Employees working all hours to try and meet basic needs could easily result in fatigue and burnout. And as we all know, tired, anxious, and exhausted employees do not equate to healthy, productive teams.
Workplace burnout may impair short-term memory, attention, and other cognitive processes essential for daily work activities, making employees significantly less productive. Burnt-out employees are also 63 percent more likely to take a sick day and 2.6 times as likely to be actively seeking a different job.
Keen for self-care
More businesses are encouraging employees to prioritise self-care during these challenging times. While well-intentioned, financial instability is making it difficult for employees to afford basic necessities, let alone invest in self-care activities or wellness-related expenses.
Those working irregular or unpredictable schedules, find it near impossible to plan and commit to self-care activities. The reality for many, especially those in lower-paid or high pressure roles, is that they can’t simply take breaks, when they feel like it or need it from stressful jobs.
Those in marginalised groups face much more than just work stress too. Compared to other economic classes, they are more likely to face exposure to crime, drug-saturated neighbourhoods, and overcrowded residences.
Lower-income employees may not have access to the same resources that higher-income employees do, like fitness facilities, healthy food options, and mental health services.
Nutrient-dense foods are also now too expensive for many households to afford. A recent study estimated that lower-income families would need to dedicate a whopping 43-70 percent of their food budget to fruits and vegetables to meet dietary guidelines.
Where do we go from here?
It’s clear the ongoing stress associated with living with less than one needs can create constant wear and tear on the body. This, in turn, disrupts and harms the body’s physiological stress response mechanism while also diminishing cognitive and psychological responses essential for confronting challenges and daily stressors.
Many businesses pride themselves on offering a suite of perks for employees, which they claim will help those during particularly difficult times, like the ongoing cost-of-living crisis. However, our 2022 data actually suggests that 1 in 3 employees are offered no physical or mental wellbeing services by their employer.
We believe responsible businesses should offer these services to their staff. Those who don’t already should invest in the health of their employees by speaking to expert health third-party providers who can guide them on the best offerings to introduce.
For the two-thirds of businesses that do offer employee benefits, it’s worth noting some of these might not be accessible or suitable to all employees. For example, is offering a subsidised gym membership a benefit if employees are not located near a gym or are able to afford the reduced membership?
Managers need to fundamentally rethink their benefits offerings to promote fairness and equal opportunity and prevent burnout. When deciding which to offer – specifically during a cost-of-living crisis- it’s essential to gather feedback from employees to understand their unique needs and challenges. Tailoring benefits to address their immediate concerns can have a significant positive impact on their well-being and loyalty to an organisation.
Providing employees with fair and competitive wages is one of the most direct ways to address financial challenges related to the cost of living. A living wage can help employees cover their basic needs without having to struggle as much financially.
Investing in employees’ professional development through tuition reimbursement or training opportunities can help them start to build the skills needed for potential higher-paying roles, which they may be able to apply for more quickly in the future.
Making sure you provide access to relevant benefits is also key. For example, offering flexible work options, like remote work, flexible hours, or compressed workweeks, can help employees better manage their schedules and save on commuting costs.
However, if employees’ roles do require them to be physically in the workplace, perhaps your business might consider providing transportation benefits instead, like subsidised public transportation passes, which can help alleviate commuting costs. Offering childcare benefits or access to discounted childcare services can also help employees manage the high costs associated with childcare during a cost-of-living crisis.
Where signs of burnout, financial stress, or anxiety are recognised, employers should signpost employees towards the emotional wellbeing support available to them. This may include Employee Assistance Programmes (EAPs) or cognitive behavioural therapy sessions (CBT), which give individuals direct access to a specialist who can help them explore and understand the factors which are impacting their health and wellbeing.
Communicate helpful resources like where to apply for monetary support, how to access debt management helplines or find financial literacy programmes. Regardless of whether this support comes from an external resource or from your own company’s offerings, this advice can empower employees to make informed decisions about budgeting, saving, and managing their finances.
Additionally, highlighting community resources, government programmes, and nonprofit organisations can help employees find accessible self-care resources if they have limited financial means.
During these challenging times, employees want to know their employer has their best interests at heart. Wellbeing is tied to feeling valued and appreciated, and it’s essential our colleagues are met with understanding and assistance every step of the way.
