During the Covid pandemic, there was a growing sense that employers were taking an interest in the whole life of their employees rather than limiting their attention to what took place from 9-5. This greater concern has been almost instantly put to the test during a cost-of-living crisis that has meant many workers have struggled to keep their heads above water as inflation has run riot through economies across the world.
Research from Lancaster University and the Work Foundation suggests that it’s not a challenge that employers are meeting. The study found that while around two-thirds of leaders thought that their organizations have a significant role to play in helping employees cope with the rising cost of living, just 40% had actually introduced any measures to do so.
“Employers have a crucial role in supporting their workers through the cost of living crisis,” the researchers explain. “Even if we see inflation halve in 2023, the impact of rising prices will last long into the future, especially for those on low incomes and in insecure employment—factors which disproportionately affect women, disabled people and those from black and ethnic minority backgrounds.”
Rising costs
The research saw around a thousand senior decision-makers from British firms quizzed to understand how they’re dealing with the cost of living crisis. The results suggest that most support was ad-hoc in nature, with financial support especially likely to be short-term.
Nowhere was this more evident than in the fact that less than 20% of leaders introduced some kind of cost of living support also introduced pay rises that were somewhere close to the double-digit inflation that is common across the world. Instead, it was far more common for organizations to provide a one-off bonus or support payment.
The support that was available was most likely to have been provided by larger organizations, which were over 15% more likely to offer employees some assistance than small firms. There was also a substantial divide between employees and the expectations they have of their employer.
For instance, those in secure employment and with higher incomes tend to have much higher expectations than those on lower pay and in insecure roles. These expectations typically go beyond mere pay rises and include a range of other support measures. For those in insecure work, there were generally few expectations of any help at all.
“It’s vital that business leaders engage with their workforce to understand the challenges their employees face, and put proper financial well-being strategies in place,” the researchers explain. “Ensuring pay levels rise as close to inflation as possible is key, but if businesses find themselves unable to afford such an uplift, there are lots of other ways they can offer support.”
Innovative solutions
The study found that there were some innovative solutions on display, however, such as the provision of in-store vouchers or gift cards pre-loaded with money. Other employers provided more flexibility over their payment schedules or interest free loans and independent financial planning advice.
A major barrier to overcome was the general reluctance of many employees to talk about their financial affairs, however, which made offering any support difficult for employers.
“Although the relationship between employers and employees has shifted since the pandemic, our research does suggest there remains a stigma that prevents many employees from feeling able to discuss their circumstances and seek much-needed support at work,” the researchers explain. “Employers looking to act must prioritize creating an inclusive and safe workplace culture, and offer means of accessing support that their employees feel comfortable in harnessing.”
The researchers believe that the government has a crucial role to play in providing maximum job security to workers. To achieve this, they recommend that the government should reinforce employment rights and guarantee access to secure jobs. The Work Foundation also proposes that the Department for Business and Trade should lead a consultation on an Employment White Paper to develop thorough proposals for modernizing employment rights and protections.
If companies are striving to take more of an interest in the whole lives of their workforce, then the current cost of living crisis suggests that they still have some way to go.
