Supporting employees in the face of rising living costs.
To some extent all times are uncertain and challenging, but at the moment we’re seeing food prices rising at their fastest pace in nearly 15 years, aligned with skyrocketing energy bills. Upheaval following the recent mini budget has resulted in the Bank of England taking action, and it’s predicted that a rise in interest rates will significantly increase the cost of mortgage repayments (and subsequent bumping up of rental charges).
All in all, it’s looking a lot grim as we head into winter, and many employers are considering how they can support their employees in these difficult times. But how do we do this, recognizing that some people will need more support than others?
The word poverty is a difficult one. It’s not nice to say, and it’s certainly not nice to think that our employees might be experiencing it. But the reality is that this is what we’re looking at, for an increasing number of people.
It’s a misconception that the only people living in poverty are unemployed. This simply isn’t the case. In fact, in-work poverty has increased over the past two decades, with 17% of people in poverty living in households where all the adults are working and at least one adult works full time.
So we can see that this isn’t just an issue about levels of government benefits and access to them, it’s about people in work accessing sufficient and secure working hours, which pays enough for them to heat their homes, feed themselves and their children (we have 4 million children now living in poverty btw) and provide the other fundamentals of home life. If you’re a single parent then this becomes significantly harder, with many single parent families facing the greatest deprivation in our society.
What can we do about it?
Some companies are considering ‘Energy Payments’ and while this is a brilliant idea, it’s a broad-brush response. Many of your employees won’t need the support – a bit of extra cash is always appreciated, but this approach isn’t targeting your limited resources to where they are going to help most.
So Energy Bonuses don’t target need. They’re also a short-term solution. You can’t (I assume) just keep giving them out, but the cost of living isn’t likely to come down anytime soon. Has it ever, really? (answers from economists on a postcard, please)
How can we support those employees who might need additional help? This is a really sensitive situation, because we all have individual life situations which may lead us to poverty. Because of this complexity, there is no defined ‘poverty line’ anymore. Joseph Rowntree Foundation defines poverty as being when your resources are well below your minimum needs. If you’d like to explore this further, here’s an excellent article: What is poverty? | JRF
Instead of one-off payments, I’d suggest you assess your employment processes. Are you a living wage employer? Do you ensure to the best of your ability that people are enabled to work the hours they need to work, with flexibility to facilitate this?
In response to increasing costs, Living Wage Foundation | For the real cost of living has announced new living wage rates – increasing by 10.1% to £10.90 across the UK and £11.95 in London. How will this affect your contract commitments and viability? You might need to discuss this issue with clients.
Providing additional support for employees starts with trust and understanding. Line managers and HR staff become vital to this approach, encouraging employees to communicate need and access support in a non-stigmatising way. A company Hardship Fund can be a lifeline for staff, in many cases helping them avoid unethical lenders. Increasing numbers of businesses are working with their local Citizens Advice Bureau and/or Credit Union to provide access to financial advice and support.
And don’t assume or patronise. I remember being (rightly) scolded once by a community professional when I’d talked about offering budgeting session support for low-income families. It was pointed out that most adults living in persistent and deep poverty could teach me a thing about budgeting, as every purchase they make is mindfully done. Don’t jump to solutions, instead ask what support can be offered, and review the effectiveness of this support with the person it is aimed to help.
There is ultimately, no easy solution to financial hardship, but there are actions we can take as employers to support where we can. Good luck on your journey, and I would be very interested to hear of actions which are making a difference for people’s lives.
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