The cost of living crisis and employee anxiety

Financial stress and economic uncertainty can have an impact on mental and physical health. As the cost of living crisis deepens at the start of the winter months, it is a topic at the forefront of everyone’s mind. Anxiety around finances is inextricably linked with performance and morale at work, and if not already on your people agenda, employee financial wellbeing should be.

Employers are already facing pay increase and other related requests and will no doubt be preparing for a potential influx of pay rise requests from employees. HR professionals have recognised that “doing nothing is not an option” for employers who should consider whether they can reasonably facilitate staff wage increases or bonuses. Some employees may also have a contractual right to a pay rise or bonus. Employers who do not have extensive financial resources may have to get creative to help support their employees for example, by offering targeted benefits like travel ticket loans or discount packages. Some are also looking at offering short term financial hardship loans or similar as well.

Quiet quitting – should employers be worried?

Given the currently economic turmoil and the dramatic change in working life following the pandemic, it is not surprising that the phenomenon of ‘quiet quitting’ has resurfaced. Despite its name, it has nothing to do with employees leaving their job. Instead, it is a term for when employees only do the job that they are being paid to do without taking on any extra duties or participating in extracurriculars at work.  Some view this as a reflection of employee financial and pandemic induced burn out.

Risks for employers

Employee engagement and morale is intrinsic to the success and reputation of a business. Employers may start to see an increase in stress and anxiety related absences leading to a wave a bad reviews on workplace review forums such as Glassdoor and/or from customers or clients. In turn, employers could find themselves in a vicious cycle of being unable to attract new talent combined with an increase in resignations, low productivity, absence management issues and potential discrimination claims.

What can employers do now to help?

It is widely understood that employee wellbeing directly affects productivity and performance. Employers that truly understand which offerings make employees feel cared for at a particular moment in time will have a competitive advantage in the current tight labour market. Some of the following may help:

• Consider implementing provisions for financial education as part of a wider mental and physical wellbeing offering.
• Employers have the option to provide financial support to employees. This could be in the form of a loan or extraordinary bonus where terms could be applied to require employees to pay this back if they leave within a certain period of receiving it.
• Consider employee pay rises to match inflation if possible.
• Regular manager discissions to keep abreast of employees’ needs and concerns.
• Open forums for communication to promote a connected workforce whilst maintaining hybrid working and a work life balance. This will help to prevent employees from suffering burn-out.
• Regular support and feedback for employees, as well as conducting meaningful appraisals to aid career development.
• Monitoring employee morale by carrying out firm wide pulse surveys.
• Promote awareness of the benefits offered by the organisation.

If you would like to discuss any of the above or require assistance with drafting loan schemes or bonus schemes, please contact one of our Employment experts on 0161 832 3434.