Helping your staff through a higher cost of living
Read time: 4 mins Added: 22/01/2024
Despite signs that inflation is starting to fall, many people are still struggling with the high cost of living. Taking steps to help your staff through tough times shows how much you value them and can bring benefits for staff wellbeing and business resilience.
When your staff are worrying about their bills or what the future might bring, they can be distracted from their everyday tasks. That stress and anxiety can lead to poor outcomes for them and you.
An uncertain future
Although food and energy prices are starting to stabilise, the economic outlook is far from reassuring. The Bank of England is forecasting that the economy will stagnate in the near term and, while interest rate rises may have paused as inflation falls, they stay an option if inflation starts to rise again.
Findings from the 'People's Panel' on the cost of living from March 2022 to March 2023 reported by the Scottish Government in November 2023, showed many are struggling with severe hardship.
The Scottish Government has announced further targeted support through its Emergency Budget Review. There are also things that businesses can do to help staff feel supported. Many of these steps won’t only help improve staff wellbeing but could also improve retention rates, help you attract new talent, and help to make your staff and your business more resilient.
How businesses can help
Talking to staff and creating a culture that’s open and honest can be a good first step in understanding the challenges they face and what kind of support would be useful to them. Staff may be worried about confiding their difficulties so offering a safe space for them to share how the cost of living is affecting them can be useful.
Communication should also be a two-way street, so make sure you’re transparent about the challenges the business is facing too from rising costs. That can help strengthen relationships and inclusivity.
Reviewing pay structures
Where you can, financial support is clearly important. Making sure that your lowest-paid employees are earning a ‘Living Wage’ will help them both practically and to feel valued. Some 3,400 employers in Scotland have signed up to the scheme, with many reporting benefits such as a better reputation and more productive employees.
Broader benefits
If you can’t offer wage rises in line with higher inflation, being fair can really help. It might also be worth looking at what other benefits you can offer your employees. In the short-term, discounts or greater flexibility can make a difference.
Hybrid working or working from home could reduce the amount staff have to spend commuting. Incentivising car-sharing or cycle to work schemes, and making them practical options by providing changing facilities, can help with rising transport costs. Even adding a microwave to staff kitchens can help them make rather than buy lunch.
In the longer-term, talking to them about the benefits of your company pension scheme can be reassuring. Signposting to external support services to help with managing finances or accessing benefits, like Citizens Advice, can also help.
Practical help
It can be a good idea to review your financial processes too. Choosing the right payroll software so that employees are paid on time every week or month, and mistakes are minimised, can help with financial worries and make your back-office more efficient. You could even consider implementing an ‘income streaming’ service, which means employees can draw down some already-earned wages before payday. That flexibility can help them avoid resorting to expensive payday loans.
Prioritising wellbeing
It’s important to support your employees’ mental health and help them with more practical stuff. Checking in with how they’re managing, offering mental health breaks, or even providing guidance about where they can get extra support, can really make a difference. We have a range of guidance that you can access to help you support your employees’ wellbeing.
With these tips, you can offer real and practical support to your staff, helping them to feel valued and helping you to foster a workforce that’s engaged and resilient.
Ways you can help your staff
Here are some steps you can take to support your staff and build a more resilient business.
1. Be open – share how the rising cost of living is affecting you and your business and how you’re managing it. Being honest and transparent can help strengthen relationships.
2. Review your wage structure – ensuring that your lowest-paid employees are earning a ‘Living Wage’ is a good first step. Almost 3,000 Scottish employers have signed up to the scheme, and 80% of them believe it’s improved the quality of work of their employees. If you can offer inflation-matching wage increases, that’s great, but fair and competitive pay is a good starting point.
3. Take a look at your broader employee benefits package – financial support doesn’t have to mean an increase in salary. Offering employee discounts on your own products or salary sacrifice schemes in exchange for childcare vouchers or travel cards can help. Other incentives, such as schemes that promote car-sharing or cycle-to-work could help employees manage rising transport costs.
4. Flexibility – hybrid or homeworking could reduce commuting costs where flexibility works. You could even consider implementing an ‘income streaming’ service to allow employees to draw down some already-earned wages before payday, giving them flexibility to avoid payday loans.
5. Financial processes – automating your payroll to ensure it is accurate and timely can reduce employee worries. Other tools such as accounting software, for example, can reduce your admin time while helping to manage your finances more efficiently.
6. Wellbeing – offering mental health support can make staff feel supported. Through our partnership with Mental Health UK, we have created a range of resources to help businesses support staff wellbeing and mental health in the workplace.
7. Focus on the long term – talking to staff about the long-term benefits you offer, like your company pension scheme, can be reassuring. External resources like the government’s Money Helper service are also on hand to help your employees with their personal finances and many banks have also set up helplines to support customers.
As the cost of living rises, so does the cost of running your business. We’re here with the guidance, funding and support to help you thrive today and tomorrow. Visit our business costs and uncertainty hub.