Concerns surrounding Brexit and the impact it will have on the cost of living for millions in the UK continues to grow. Credit broker CashLady recently conducted a survey that revealed more people than ever are turning towards short-term, high-cost credit in an attempt to cover household expenses.
In these times of uncertainty companies that can offer support and guidance for their employees will allow them to reap the benefits in return. Staff want to feel they are valued by their employer and providing ways to enhance their financial wellbeing creates a better working environment and higher levels of productivity as a result. Read on to find out four key ways you can support employees with the rising costs of living.
Cost of living increase
Living expenses regularly increase due to inflation, which means everyday items such as housing, food, clothing and utility costs force staff members to spend more in the process. In order to live a stable and productive lifestyle, employees should receive a salary that also goes up to a similar level as living expenses.
A cost of living raise is designed to cover the rise in inflation. This means when the cost of living increases by a particular percentage, employee wages should also follow suit. This is generally done on an annual basis, so if the cost of living goes up by 2%, staff wages are increased by the same amount.
Traditional raises mean each employee receives a different amount based on the incentives or rewards on offer. A cost of living increase ensures everyone receives the same percentage increase, although the final financial figure will depend on their individual wage.
Signing up to a reward or loyalty scheme will allow staff members to benefit from cheaper goods and services and reduce the strain on their monthly outgoings. There is a range of these available for companies to choose from as they can offer important savings on key items they need to purchase on a monthly basis.
According to a survey by employee review website, Glassdoor, they found that discounts were one of the top ten benefits wanted by staff. In fact, as much as 17% responded by saying it was valued higher than receiving a pay rise.
However, before committing to a discount scheme ask your own employees if they will benefit from it. Find out if staff will appreciate the opportunity to save money, or if they feel there are other areas of the business that requires more urgent investment, as creating a working environment they are happy to remain in makes far more sense.
Automatic enrolment into work-based pension schemes was phased in from 2012 (beginning with the largest UK employers) until the cut-off date of 1 February 2018, making it compulsory for employers to place staff onto a scheme while also paying contributions. This applies to every full-time employee aged 22 or over and earning more than £10,000.
While this is a great starting point to reduce the financial burden on staff, there are more businesses can offer. Employees can opt out of the pension scheme they have been placed onto, which many younger staff members may choose to do. Providing them with guidance on pensions will help them to understand the value of creating a pension for later in life.
This can be bolstered further by increasing the minimum contributions provided by the company, making staff feel more valued and encouraging them to remain with the company for longer. Pension benefits are of particular value to high-skilled workers who are more advanced in their careers, and when trying to convince new members of staff to join your business it can prove to make the difference when it comes to choosing you over one of your competitors.
Providing guidance on how to manage money and deal with debt could provide employees with invaluable information that will enable them to make the most of their pay. This is especially true for younger workers who are still learning to deal with managing their outgoings each month.
Of course, not every company has the capabilities to provide this kind of assistance in-house. In this scenario, the best option may be to outsource this to a management service provider who can create a specific program for staff.
Money management advice can be further supplemented by initiating workplace savings or investment schemes. There are a number of these available, but the most popular choices tend to be Workplace ISAs (investing in stocks and shares from your salary), Save As You Earn (monthly savings that offer a tax-free bonus and a share buying option) and Share Incentive Plans (tax-free share buying in the company you work for).