· 2 min read · Features

How the economy is changing the way we need to think about employee wellbeing

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For the first time in a long time, slithers of optimism are starting to appear in the headlines. If the story of January was worries about a triple dip recessions, February has brought hints from the CBI head John Cridland that the economy may be back on its feet and suggestions from the Bank of England that we may be edging towards recovery.

Yet just as this light appears at the end of the dark economic tunnel, this week there has also been a timely reminder, in the form of a new report from the Resolution Foundation think-tank as to how hard the "squeezed middle" income families are finding it to make ends meet - particularly at the lower end of that income bracket.

They note that of the one in three working age households which fall into this bracket, many fail to make ends meet on a monthly basis. The result is that three quarters (68%) of households say they are cutting back on spending. What's more, the report argues many remain susceptible to minor shocks like big energy bills and even more are finding it hard to meet long term financial commitments like pensions.

This squeezed middle makes up 5.6 million households in the UK and as an employer you are likely to have a fair share of people who belong to these households in your business.

As salary and wage levels remain look set to remain under pressure for the foreseeable future - particularly given the impact of the inflation rate that is stubbornly sticking above the level of pay reviews - I couldn't help but think as I read the report about the extent to which employers have the power to make a real difference.

Although you may argue that the state of their household finances should not be an issue for your business, their impact on employee performance in the shape of stress, lowered productivity and absenteeism is a problem which merits attention from HR - after all it's our job to ensure we have a workforce which is firing on all cylinders.

So what can we do?

We may not be able to do much with salaries but we can help employees deal with the crunch in living standards through looking again at the type of benefits and reward which is on offer. Despite the financial stress felt by many, benefits remain an immensely underused resource. Many schemes are woefully underused and many employers still don't offer a range of schemes which benefit employees above and beyond the pay packet.

For lower earners in particular, the use of salary sacrifice and retail savings schemes can make a difference of hundreds of pounds over a year. Financial education can help employees understand and plan, filling an important knowledge gap.

All these little things can make a big difference and the provision of the right benefits and reward as does the process of listening and talking to employees about what they need.

My last thought on reading the report was just how important it is to take time to gather insight around the different pressures and issues faced by the demographics in our organisations. While much talk tends to focus on the impact of technology and media on our employees or the preferences of Gen Y or Gen X, the changes wrought by the economy are equally profound and need just as much consideration.

Andy Philpott (pictured) is sales and marketing director at benefits provider Edenred