Inflation is running at its fastest pace in over 40 years. The average cost of gas and electricity bills has jumped by 54% in the last month alone. Something needs to be done immediately to support those struggling to make ends meet.
Of course, the government should be providing help for those who need it most, but responsibility also falls to businesses, who are uniquely positioned to help their staff at the point of payroll.
Cost of living crisis:
The mental health webinars and financial wellbeing courses that organisations offer in times of hardship are missing the mark.
If companies are serious about protecting staff, they need to adopt the same approach that they would use to solve any other issue in business; through tangible, measurable strategies that deliver real outcomes.
The main issue centres around a lack of savings, leading to poor financial resilience in times of hardship. Organisations must take responsibility and help alleviate such pressures.
Many employers overlook the fact that they’re in control of not just how employees are paid, but when they get paid too.
By using tools such as earned wage access, employers are able to provide access to pay early if necessary, smoothing income to support unforeseen expenditure, such as vet bills or childcare. This ensures staff are covered without having to get into debt.
This will help employees to solve immediate cashflow problems but, of course, a long-term solution is also necessary.
Lack of savings
In order to protect oneself when unexpected expenses arise, it’s necessary to have a savings buffer. In times of economic hardship, this is very difficult to build. However, the employer is, again, uniquely positioned to provide a solution.
Organisations that offer salary-linked savings schemes are ahead of the curve, taking money straight out of an employee’s paycheck and add it to an account that has access to some of the highest savings rates on the market.
Even if this is just £50 a month, over the course of the year, it provides employees with a £600 savings buffer.
It also creates a life-changing savings habit by taking away all of the barriers to putting money away.
With real solutions at the point of payroll, organisations can not only provide effective solutions but measurable solutions, where they’re able to track how much money staff are able to save.
This is a much more business-minded approach that provides both immediate relief and a long-term solution during a time when staff are at their most vulnerable.
To learn more, visit HR magazine's cost of living learning hub here.
Stephen Holliday is CEO of Level