Cost-of-living crisis: Only 5% believe their employer is doing enoughby
As the cost-of-living crisis bites down hard across the nation, new research reveals how benefits are essential for staff retention.
The cost-of-living-crisis is in full swing, as the UK is feeling the effects of the worst financial depression in 30 years. Inflation is surpassing wages; fuel prices are at an all-time high, and an increase in taxes means bills and credit commitments have become an increased burden.
Most of the country will now be weighing up what is a necessity and what is an unaffordable luxury. With the potential of the crisis stretching through to 2024, according to The Bank of England, it’s no wonder employees’ financial concerns are at a high, with 27% saying that money worries have affected their ability to do their job.
Right now, benefits are critical
But it’s not smooth sailing for employers either; with businesses also feeling the pinch, they are assessing where to spend the pennies. Salary increases to support staff aren’t always an option in these times. But despite the employer purse strings being tighter than ever, employees are calling for help. Recent research revealed only 5% of employees believe their employer is doing enough to support them through the crisis.
This comes at the same time as a staggering 63% of employees saying that they would leave their current job in order to find an opportunity that provides better financial support. Employers must find alternative ways to help staff, as cost of living support becomes critical to retaining talent.
Employee benefits are no longer just added incentives, they are a simple way for employers to help their staff with financial wellbeing. In fact, 83% of employees agree that workplace benefits will play an important role in improving the cost of living, and 95% of employers agree. Employers are facing a precarious time, when you pair the current crisis with the Great Resignation, the need to keep employees engaged is key, or staff will leave.
What’s holding employees back from using their benefits package?
When looking at both the employer and employee perception of workplace benefits in our research, we found a lack of understanding from employees regarding their benefits package and how to utilise this. It's great that there are benefits available to help support employees, but there is a clear disconnect when it comes to staff taking advantage of these resources.
Since the pandemic, one of the more obvious benefits to help manage costs is hybrid and remote working. This provides cultural and financial benefits in the form of saving on travel costs as well as offering greater flexibility. But other workplace benefits exist and offer support in a variety of ways.
SME employers grossly overestimate the level of understanding most of their employees have surrounding offerings such as salary sacrifice
One example is salary sacrifice schemes, which allow employees to pay for products or services from their salary before tax and NI deductions, making savings. Salary sacrifice arrangements put real money back in employees’ pockets. However, when employees were asked what the term ‘salary sacrifice’ meant, almost three-quarters (73%) admitted they did not fully understand it, with a concerning 18% who had no idea of the meaning at all.
Sadly both enterprise and small and medium-sized enterprise (SME) employers grossly overestimate the level of understanding most of their employees have surrounding offerings such as salary sacrifice. These schemes and initiatives are fantastic ingredients, but visibility and explainers are recipes for success.
Cyclescheme is an example of salary sacrifice. These initiatives can save employees up to 40% on bicycles and accessories, encouraging them to cycle to work and ultimately cut down on travel costs while keeping fit.
Other schemes help employees to save money or spread the cost out on useful products such as technology and white goods, whilst other benefits can help with vouchers to save on weekly food shops. And as food prices rise to the highest rate in 13 years, these benefits have never been so important.
Employers need to ensure they are listening to what their staff want from their workplace benefits, as well as communicating more effectively about the benefits already offered
Time to take action
Despite a lack of communication between employers and employees, employees are already making changes to make their money go further. Since the cost-of-living crisis began, 24% of employees said they have been using their workplace benefits more. This shows there is an appetite from employees to take advantage of benefits, but it's up to employers to ensure their talent is recognising the full potential of benefit schemes.
Employers need to ensure they are listening to what their staff want from their workplace benefits, as well as communicating more effectively about the benefits already offered. With the cost-of-living crisis showing no signs of slowing down, employers must address this disconnect to help employees utilise their full range of benefits to help mitigate the crisis.