The cost of living crisis
The cost of living crisis is hitting everyone hard as the UK experiences its biggest economic crunch in decades. Inflation is outstripping benefits and wages, at the same time as tax hikes, and the reality is that disposable income has reached its lowest point in years. And the problem isn’t going away as the Bank of England predicts the current cost-of-living crisis will last until next year, with the potential to continue into 2024.
But as employees tighten their belts across the country, so too are employers. The drop in disposable income is hitting company revenue, and many businesses are quite simply unable to raise wages. However, there are other ways that organisations can help their employees to reduce the impact of the increases in cost of living.
Employee benefits and the cost of living rises
Research conducted by our team found that employee benefits have a crucial role to play during the current cost of living crisis, and can be better utilised to support employees. They can also help in the fight to retain talent as the businesses, across all sectors, experience the impact of The Great Resignation.
Almost two-thirds of employees (63%) say they would be likely to leave their jobs for more lucrative opportunities due to the cost-of-living crisis, and workplace benefits are increasingly factored into this valuation. When the current crisis is considered alongside The Great Resignation, this is a particularly perilous time for employers. They need to make sure their employees feel supported during the cost-of-living crisis or risk losing talent.
Employers have a duty of care
Our findings show that both sides – employees and employers - agree that employers should feel responsible for supporting their employees through the crisis. However, opinions on whether that support is being provided are not quite as aligned as only 5% of employees believe their employers are giving them enough support, and many employers who took part in the survey said they feel they could be doing more.
How can employers support employees through the cost of living crisis?
Workplace benefits are often created to have varying impacts. For example, hybrid and remote working have cultural and financial benefits like saving money on travel and offering flexibility, while other benefits are designed with the intention of saving employees money.
1. Salary sacrifice
Salary sacrifice, where employees can pay for services or products from their salary before they receive it to reduce tax, puts real money back in employees’ pockets. A great example is Cyclescheme, from Blackhawk Network Extras, saves employees up to 40% on bicycles and accessories, and helps them cut fuel costs by cycling to work. Another is Techscheme that allows employees to save money and spread the cost of thousands of consumer electronics and essential white goods products.
2. Prepaid cards
A prepaid card works in the exact same way as any other debit card that is used as a way of paying for things. It is much like a gift card; except you’re not restricted to using it with specific brands. A prepaid card allows the owner to spend whatever amount of money has been loaded onto the card, and once the balance is spent, the card can be topped up and reused. Offering employees prepaid cards as benefits and rewards is a sure way to help employees save money and afford essentials as well as little luxuries.
3. Gift cards
The biggest perceived barrier to the take up of workplace benefits (for both employers and employees) is a lack of relevance. Employers should ensure they are listening to what their staff want from their workplace benefits, as well as communicating more effectively about the benefits already offered.
To break the perception that workplace benefits won’t be redeemed, we have a range of gift cards that can suit a variety of interests and hobbies. Whether it’s for shopping, travel, gardening, an experience or an adrenaline fuelled activity, we have it all at Blackhawk Network.
If you’d like to chat about how we can help you support your employees through the cost of living crisis, get in touch via our contact form on the right or call 0203 758 4313.