High inflation rates, in particular substantial increases in energy, food and housing costs, are creating critical challenges for households across the UK, with the effect of eroding rises in nominal earnings. The OBR report in November projected that real household disposable income will fall by 7% by 2024. According to a survey by the CIPD in April 2022, one in four employees say that money worries affect their ability to do their job.
In this context there is a strong business case, alongside moral arguments, in favour of employers showing their commitment and making concerted efforts towards supporting the financial wellbeing of their workforce. Given that many employers are facing similar financial challenges themselves, what steps can you take as an employer to tackle in-work poverty and to support your staff through the costs of living crisis?
You should consider targeting pay rises towards lower-paid staff. In some cases, these rises will be determined by increases to the National Living Wage and National Minimum Wage which will soon come into effect. The National Living Wage is increasing by 9.7% to 10.42 per hour from 1st April, with similar rates of increase to the various National Minimum Wage rates.
Some employers are offering one-off cost of living support payments to their staff, which can support staff morale as well as giving some immediate financial assistance.
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