The Impact of Cost of Living on Employment
17 Dec 2022
The UK’s inflation rate
has increased to a 40 year high of 9.1%, and it’s predicted that food bills will rise by £380 this year
. Naturally, people are concerned about how they are going to make ends meet.
The British Medical Journal
found that 55% of people believe that rising costs have impacted their mental health negatively, with 25% of people being diagnosed with poor mental health by doctors as a result.
When coupled with the steady decrease in unemployment benefits since 2009
, employers are starting to consider providing extra support for their employees during this uncertain time.
According to ONS
, 77% of the UK workforce are worried about the rising cost of living, with 90% preferring to work from home, to help reduce expenses.
However, research shows
that in some cases, remote workers use 75% more gas and 25% more electricity per day than those that work in the office five days a week.
As a result of this, 23% of 18-24 year olds are planning to work in the office to help reduce home energy bills (ICAEW
). But, with the price of petrol, public transport, and meals increasing, the cost of going to the office is also getting even more expensive.
How to support employees throughout the cost of living crisis
According to NCT
Provide childcare support
, parents pay an average of £7,000 a year for a part-time nursery place. The UK Government offers 30 hours of free childcare a week for 38 weeks
, for children between the ages of 3 to 4.
The UK government also offers a Tax-Free Childcare scheme
that gives up to £2,000 per child a year, that goes towards childcare costs.
For every 80p parents put into childcare, the state will put 20p in, giving back the basic-rate tax on a childcare bill.
Offer personal finance training
According to CIPD
, 57% of employers focus on helping staff with their mental wellbeing, but only 11% of employers focus on financial wellbeing.
Teaching financial wellbeing could help employees navigate the current crisis better through learning how to budget and save their money, which will in turn help improve mental wellbeing.
branded 2022 as a ‘frightening year of financial fear’, and predicts that in-work poverty (where an employee’s income after housing costs is less than 60% of the national average), is going to drastically increase.
To help overcome this, employers could look at implementing a financial wellbeing policy.
A financial wellbeing policy consists of three steps:
- Remove any stigma surrounding conversation about money worries in the workplace by normalising them (find out how to ease money worries at Christmas in our latest blog).
- Direct your employees to the free, independent and confidential debt and money advice available from the government’s Money and Pensions Service.
- Make any benefits offered easy to access and tell your team how to make the most of them.
Give managers more management training
Did you know, bad management costs UK businesses £84 billion a year
It is clear that the cost of living crisis will impact everyone differently, so it’s important that managers are given mental health support training to identify any signs of poor mental health or financial stress amongst the workforce.
Offer flexible working (where possible)
For business owners that can, flexible or hybrid working can help employees improve their work life balance and lessen the financial strain of travelling to and from the office. This in turn can help improve workplace culture and work life balance.
However, with people facing similar price increases at home, some people are keen to work from the office if it’s the cheaper alternative.
Help your workforce with Ingeus
Employers are faced with a difficult task of balancing rising costs whilst supporting employees through an incredibly challenging time. From providing health and wellbeing support to new and existing employees, to finding funding and hiring new talent, knowing what to do next isn’t easy.
At Ingeus, we offer a fully managed suite of services to support your business during this tricky time. We offer help within retention, with access to funding to train your new employees, and offer mental health support through our programme, Able Futures
Find out about our retention services.