1. Are senior leaders ready to respond?
It is not clear whether business leaders fully understand the plight of their employees. At the height of the pandemic, many business leaders s were praised for their compassion, with CEOs setting the tone by connecting directly with their organization . But the pandemic was an external shock that affected every employee, irrespective of their wealth – the cost of living crisis is something very different.
Insulated from price rises by high incomes and accumulated wealth, many senior executives may be simply unaware the financial challenges their staff now face. Only the more empathetic and engaged leaders will understand the scale of the problem – and the impact it could have on their workforce.
2. What exactly can leaders do to help?
When employers do recognize financial hardship in the workplace, there are several ways in which they could help – and the most obvious responses will not necessarily be the most appropriate.
Salary increase is clearly an option, particularly as wage increases across most of Europe have been running well behind consumer price inflation. But there are potential difficulties here even at organizations where more generous pay is affordable. One problem is that across-the-board salary increases do not efficiently channel support to those who need it most, and higher-paid staff may demand increases too in order to maintain salary differentials. Then there is also the broader economic reality that wage increases may simply contribute to the inflationary spiral.
Benefits, subsidies and discounts
One alternative might be to focus resources on benefits that are likely to be of most value to hard-pressed workers. That might include more support with the cost of childcare and healthcare, for example, or subsidized meals in the workplace. Similarly, transport costs are a disproportionate burden on those on low incomes, so subsidies here could prove valuable.
In addition, employers could find ways to put their purchasing power to work on behalf of their staff by sourcing products at lower prices than individual workers would normally pay. One straightforward way to do this is to offer staff access to a rewards scheme. Arrangements such as Ben and RewardGateway, for instance, offer employees significant discounts at outlets such as retailers, supermarkets and pharmacies.
Employers can also take a look at wellbeing. They are in a strong position to support improved financial literacy, if only by signposting employees to independent sources of advice on money and debt and by ensuring that staff are claiming all the benefits they are entitled to at work. Increased support with mental health may also be crucial as financial stress increases. Here, employee assistance and wellbeing programs can provide expert help.
Talk to employees
For employers that do not know which of these measures their staff will value most, there is a simple solution: ask them. There are formal and informal ways to do this – from staff forums to suggestion boxes and even casual conversations.
Nor do employers have to do everything themselves. One important role may be to act as convenors of assistance and collaboration. Employees may be looking to support one another: workplace venues might be ideal for holding sales of affordable secondhand clothes, for example, while the staff canteen can host lunch clubs where staff bring food to share.