What we didn’t expect in the results, which we published last week, was for the cost of living to be the second major factor dictating reward and benefits strategy for the year.
So, after much talk about the need to address issues around employee financial wellbeing it appears that employers may be finally starting to look at the issue seriously.
From a business perspective this has to make sense. Since the start of the downturn in 2008, plenty of research has emerged to suggest that money worries have an impact on employee performance, contribute to stress and undermine employee wellbeing.
What’s more, the continuing disparity between the pace of wage increases and the rising cost of living mean that more employees have been affected. As our own research has found, the impact of all of this is that very nearly half of employees (44%) are unhappy about their purchasing power and nearly two thirds are unhappy (63%) with the benefits on offer. The result is that many employees are prepared to walk away from their jobs in order to improve the situation.
Tackling the 'living crunch'
As the economy looks set to improve, employers urgently need to take steps to ensure that they hold on to the people and talent, which will let them ride the upturn.
And however attractive your workplace may be, addressing the cost of living crunch facing your employees will be critical in the year ahead as it is clearly an issue that will continue to define employee-employer relationships in the year ahead.
But while many employees would welcome more cash in their pockets, as advocated by the CBI in its New Year’s message, I think employers need to more broadly consider the support they give and employee financial wellbeing as an issue that is about more than pay.
With a bit of joined up thinking, there is plenty that can be done.
The auto-enrolment platform
The issue of pensions auto-enrolment should not only be about pensions, but should be used to as platform for employers to help employees take control of their financial wellbeing through workplace financial education – an opportunity which many employers are failing to grasp.
More broadly many employers have an opportunity to communicate more effectively about the wide range of benefits that so many employers offer – and which so many employees fail to take advantage of – that can help with the cost of living.
Lastly, engaging employees in conversations about the cost of living and the challenges they face are a route to uncovering new kinds of support employees would value.
There is no denying that pay will be the main pre-occupation in the reward mix. But refocusing the conversation to talk focus less about the money employees spend and more about the money employees can save through better financial planning, a better understanding of their reward mix and how they can make the most of the benefits they are offered will be an important step in supporting employee financial wellbeing in the year ahead.
Andy Philpott is the sales and marketing director at Edenred
