A recent ACAS survey has found that the mental health of 47% of workers in the UK has been negatively impacted by the rising cost of living. So, what can employers do to support their workers through this crisis?

Whilst there was some welcome news last week that inflation had slowed last month due to lower energy prices, households continue to feel the strain with food costs and mortgage rates remaining high. Inflation sits at 6.8% and interest rates at 5.25%. The rise in the cost of living has resulted in a challenging time for many and it is clearly continuing to have an adverse impact on the mental health of a significant number of individuals.

Whilst many employers are unlikely to be able to increase wages in line with inflation, there are other avenues that they could explore to ensure that they are supporting their workers through this difficult time. We have included some possibilities to consider below:

1. Additional employment. Businesses should consider that some employees may need to take on a second job to keep their heads above water.  We often see employment contracts with exclusivity clauses which either prevent a worker from taking on another job, or require them to obtain appropriate approval before doing so.  If that is the case, employers should consider whether it might be appropriate in the circumstances to forego these restrictions. This may be particularly relevant where an employer cannot offer a worker paid overtime. However, care should be taken to ensure that there is no breach of the 48-hour weekly working limit under the Working Time Regulations 1998.
2. Money management/financial wellbeing training sessions. Some employees may find themselves in debt from taking out loans or running up hefty credit card bills. The implications of debt on an individual’s mental health can be significant. Providing financial education on how to handle such situations could be of great assistance to workers. An employer should also ensure that they are making it clear to workers what financial support is available to them and what organisations offer free, impartial support.
3. Salary sacrifice schemes. Salary sacrifice schemes could be helpful as they can reduce the amount of national insurance contributions being paid by a worker and an employer. However, such arrangements can impact national minimum wage obligations and a worker’s entitlement to certain state benefits so it may not be appropriate for all workers. Salary sacrifice can be used for a range of benefits, including pension contributions, cycle to work schemes and ultra low emissions cars.
4. Employee discounts. Employers could consider partnering with retailers or service providers to offer employee discounts on everyday essentials.  If collaborations with local businesses could be achieved, this would bring the bonus of benefiting the local community as well as workers.
5. Free or subsidised meals for employees.  A staff canteen could help save workers money by offering meal vouchers or special discounts.  This is also an incentive to use company facilities.  Even the offer of the odd lunch or fresh fruit being provided regularly could assist workers.
6. Cost-of-living payments. Since the beginning of 2022, some employers have introduced one-off payments to help their workers, others have offered smaller payments on a more regular basis.
7. Payroll arrangements. Employers could also consider their existing payroll arrangements and the intervals at which worker’s wages/salaries are processed.  The frequency of payment being once a month can leave workers struggling to make ends meet.  Employers could consider making payments bi-weekly or introducing early salary withdrawal for workers.  Smaller but more frequent payments can also make it easier for workers to put some of their wages into a savings account or cover unexpected expenses as they come up instead of reaching for a credit card.
8. Mental health support. Poor mental health can have a knock-on effect on performance and attendance at work, whether it arises from the cost-of-living crisis or not. Employers should ensure that they are promoting health and wellbeing and the support that may be available to staff, such as any counselling services offered, signposting free external support, or just encouraging them to seek help or talk to someone.
9. Uniform subsidies. Depending on the nature of their role, workers may be required/expected to adhere to certain dress code whilst at work.  It may be difficult for some workers to comply with these requirements during this time.  Employers could consider a ‘fund’ for uniforms whereby workers could be reimbursed for reasonable uniform expenses.
10. Flexibility/hybrid working arrangements. For some workers, greater flexibility in relation to hybrid working (where possible) could reduce their commuting costs significantly. Or simply allowing a worker to attend the office for part of the day only could reduce parking costs where applicable.

We understand that many employers are also feeling the pinch from high inflation and interest rates. To ensure that their business remains financially resilient, some employers may not be able to offer much to workers; particularly as some of the above ideas may come with additional tax, legal and reporting obligations to consider. However, with the mental health of almost half of workers being impacted by the cost-of-living crisis, and the implications that poor mental health can have for the workplace, it would be worthwhile for employers to consider whether any support or further support can be provided. If you would like to discuss any of the above suggestions further, please do not hesitate to contact us.

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