As we fall headlong into the cost of living crisis, there is a recognition that financial benefits are uniquely important. It is a sensitive subject for most (perhaps mental health is the pioneer here: it was taboo, but now is openly discussed). Who wants to share their financial challenges with their employer? Who wants to admit using vouchers? The crisis is acute, yet the stigma is challenging.
The ‘cost of living crisis’ refers to the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021. According to the Institute for Government, the cost of living crisis is being predominantly caused by high inflation outstripping wage and benefit increases and has been further exacerbated by recent tax increases.
The cost of living crisis and economic crisis, in a workplace context, is being described through two distinct lenses:
Organisations find themselves having to operate with much leaner organisational structures, budget revisions including those available for health and wellbeing, and a heightened competitive job market
Moving from just keeping the lights on for the last few years towards a more sustainable operational model for today’s work world whilst balancing the ongoing economic crisis impact
Increased pressures in attracting and retaining talent at a time where economic uncertainty may lead to people becoming even more sensitive to how much they earn and how workplace wellbeing packages can enhance their lives
People’s health and wellbeing continues to be impacted as the level of change and uncertainty continues as we live through the cost of living crisis – this can be linked to increased levels of worry or an inability to maintain certain lifestyle activities that supported their health
Not all is negative, as many emerge from the pandemic with clarity on what is important to them, what they expect from employers and how they wish to shape their life for the longer term. For many, this may include a shift away from a desire for high salaries and more towards a positive work culture and having more time for themselves
The emergence of financial wellbeing
Some talk of the tensions at play as there are disparities beginning to emerge between employer and employee expectations in today’s new emerging working world – dynamics appear to have significantly shifted in the last few years. For example, legacy benefits offered by organisations are no longer meeting the needs of today’s workforce – some want greater personalisation, a choice or in some cases a budget to choose their own benefits package meeting the needs of their own personal circumstances. This presents an opportunity to support employees beyond their financial needs by giving them the option to select benefits that match their personal needs in other areas of their lives.
‘I want to understand where my silent colleague groups are. How can I engage with them a bit more? And what would appeal to them if there are gaps in the offering” - (HR Executive Roundtable attendee – 5th July, 2022)
Specific to financial wellbeing, several of the organisations represented at an HR leaders Roundtable we supported, have recognised that financial wellbeing is different. They are taking steps to make financial wellbeing benefits tangible and attractive. One company, for example, created a communications campaign tied specifically to the UK National Insurance hike, showing that by using the in house perks platform for everyday purchases, the average employee could negate the whole National Insurance increases. By making money less of a dirty word, employers can make a real difference in the coming challenging months.
The four pillars of wellbeing
To have the greatest positive impact on your organisational culture and workforce as a whole, it’s important to consider wellbeing not only from a financial perspective and instead look at the interconnectedness of financial, mental, physical and social wellbeing. For example, if someone’s financial situation is challenging it’s likely to, at least, have an impact on their mental and potentially social wellbeing.
The four pillars of wellbeing include:
Financial wellbeing: employees are worried about how they will cope financially and when they can expect things to return to normality.
Mental wellbeing: with the pandemic related upheaval over the last few years and the cost of living crisis, mental health remains a clear priority for many.
Physical wellbeing: desk bound lifestyles and challenges with health provision mean that physical health continues to be an important area for employers.
Social wellbeing: increased home working, digital meetings and potential concerns around finances can create social challenges of loneliness and isolation.
We understand that the HR space never stands still. The pandemic has put wellbeing on the agenda like never before. It has shaken up the relationship between employers and employees, giving HR professionals a once-in a lifetime opportunity to redefine the role a business can play in its employees’ lives, and the value it can get back.
Whilst we are now contending with further challenges linked to the cost of living crisis and economic uncertainty, this also presents the opportunity to make workplace wellbeing a powerful tool to support employees at a time of need. This whilst aligning with business objectives to also have your workplace wellbeing strategies act as a talent magnet, a productivity driver and a source of engagement.
To learn more about what organisations are doing to highlight the value of their financial wellbeing related offerings, and shape winning wellness strategies for the workforce of tomorrow, click here: Winning Wellness Strategies for the workforce of tomorrow