1 In 5 Employees Feel The Cost Of Living Crisis Is Impacting Them At Work

Employees Feel Financially Worse Off

We asked employees how their current financial situation compared to the same period in the previous year:

• Almost half (46.5%) of respondents said they felt financially worse off compared to this time last year
• 37.4% felt they were in the same financial position
• Only 16.2% of people felt better off financially.

The material effect of rising costs has left many workers with a real-terms pay cut. We found that most employees’ salaries aren’t going as far as they used to.

Almost Everyone Is Concerned About The Cost Of Living Crisis

While approximately half of people felt financially worse off, almost all respondents were concerned about the crisis:

A whopping 96% said that they were concerned about the cost of living crisis:

• 33% felt very concerned
• 41% felt quite concerned
• 22% felt a little concerned.

This tells us that while there some people who aren’t yet affected, most are still worried about the crisis. Staff may worry about how long costs will stay high, or feel anxious about the situation.

2 Out Of 3 Employees Are Stressed

For many people, the struggle to make ends meet often turns into stress. So, we asked employees to agree or disagree with whether they felt stressed:

66% of respondents either agreed or strongly agreed that they were stressed:

• 19% strongly agreed that they were stressed
• 47% agreed that they were stressed
• However, 19% of respondents were unsure as they neither agreed nor disagreed whether they were stressed.

Employees Are Unhappy With Their Pay

To understand more about why employees felt stressed, we asked what makes them unhappy at work. Being underpaid was the biggest reason respondents gave:

• 46% of employees were unhappy because of their pay
• 36% said a lack of recognition made them unhappy
• 32% all said they were unhappy because of a lack of work-life balance, a lack of support, and a lack of progression.

Again, the research supports that the current crisis has an extensive impact. Employees report stress and unhappiness as two key consequences of the cost of living crisis. This can cause further issues with employee mental health.

Almost Half Of Employees Feel Their Mental Health Has Been Impacted

As we’ve seen, 20% of staff felt their performance at work has been affected by the cost of living crisis. When asked about their mental health, nearly half (47%) agreed it had also been impacted:

• 33% of people agreed that their mental health was impacted
• 14% strongly agreed.

Our survey results support the idea that the cost of living crisis is leading to a mental health crisis. The Telegraph recently reported on this issue, and how stress is causing symptoms of anxiety and depression.

When people struggle to make ends meet, their mental health can suffer. In turn, this can impact their work performance. If employees are preoccupied with money concerns, they’re likely less focused on the job at hand.

This leaves us wondering how employers can help with the challenges their employees are facing.

How Can Employers Help With The Cost Of Living Crisis?

Many companies want to be able to afford pay rises and one-off payments to support their staff. But this isn’t always feasible for businesses.

To help identify what employees need right now, we asked them which benefits they wanted to receive:

• 43% of respondents want flexible working
• 41% want to work from home
• 40% wanted higher workplace pension contributions
• Close behind that, 36% of want Company Private Medical Insurance.

This data helps us understand what support employees feel they need. But how can these benefits help your team?

Flexible Working

Our findings suggest that allowing staff to work flexible hours and/or work from home will have a positive impact. It’s important to be aware that a diverse workforce will have varied priorities:

• Some staff will prefer to work on-site to save on their energy bills
• Others may have a more expensive commute and prefer to cut costs there
• Working parents have different demands on their time during typical work hours.

Giving employees their own choice empowers them to create the work-life balance that works best for them. In turn, this can improve their mental health.

When employees have more control over where and how they work, they can manage their health and wellbeing more effectively.

Higher Employer Pension Contributions

Wanting higher pension contributions indicates that employees have long-term money worries. With staff struggling to cope financially, they may be less able to save or invest for retirement.

Reviewing your workplace pension scheme can make a big difference.

Salary sacrifice pension schemes are another great option. They allow employees to make pension contributions from their gross monthly salary. As a result, staff can save for retirement and increase their take-home pay. This is a tax-efficient way to save for retirement.

Private Medical Insurance

While it can become costly for employers to implement, Group Health Insurance is a very effective benefit for staff. It enables employees to receive private healthcare quickly, rather than waiting for NHS treatment.

Policies can be tailored to include treatment for musculoskeletal conditions and mental health issues, which are the most common causes of sickness in staff. This can help your employees get back on their feet more quickly after an absence.

Company Health Insurance policies offer access to several other features, such as virtual GPs, counselling services, and Employee Assistance Programmes (EAPs).

These help to address employees’ mental health concerns, which can be caused or worsened by the financial crisis.

Joseph Toft
Senior Consultant, Employee Benefits

Support Employees On A Budget

Employers need to be very aware of stress and mental health issues among employees. These can lead to absenteeism, presenteeism and sick leave if ignored.

However, businesses are also feeling the effects of the cost of living crisis. This means employers can’t always afford to increase their support on a tight budget.

There are many other benefits employers can offer without great expense:

• Group Risk Products
  Policies such as Group Life Insurance, Group Income Protection, and Group Critical Illness provide valuable financial protection. They also come with additional features and services. For example, Virtual GPs, second medical opinions, and health & wellbeing apps.
• Employee Discount Schemes
  Given the current financial stress, Employee Discount Schemes can be a very helpful benefit. They allow staff to use retail discounts, receive cashback and earn rewards. This can help employees save money on essentials such as groceries and fuel.
• Financial Education
  Developing a Workplace Financial Education strategy can improve employees’ financial literacy. This helps them build effective money management skills and knowledge. It makes them less likely to fall into debt, improves scam awareness, and can help to reduce money-related stress.

Set Up Effective Benefits & Communicate Them To Staff

Lastly, you need to make sure staff are aware of what benefits they have and how to access them. One way to do this is by providing Total Reward Statements.

Remember that your employees will have differing challenges and priorities at times like these. It’s important to keep the lines of communication open so you know how to provide the best support.

Here at Drewberry, our employee benefits consultants can advise on the best products for your business needs and your budget. Feel free to drop us a line on 02074425880 or by emailing help@drewberry.co.uk.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3763 and growing independent client reviews rating us at 4.92 / 5
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
• Claims support when you need it most.