Nine out of 10 employers expect their employees to experience financial difficulties this winter, according to new research.
The survey, by employee benefit consultants Partners&, indicates an overwhelming majority of employers are concerned about their staff’s financial wellbeing amid the cost-of-living crisis.
It found that of these concerned employers, 52 per cent were expecting a significant increase in the number of staff experiencing financial difficulties in the months ahead, while 38 per cent were expecting a small increase. Almost two-thirds of employers (65 per cent) were already aware of employees struggling financially.
Many organisations are seeking to help their workers with one-off cost-of-living payments. This research shows a third of employers have already made (11 per cent), agreed to make (3 per cent) or are considering making (19 per cent) such a payment to support their workforce.
However one in four employers said they were not in a financial position to make such payments.
Partners& wellbeing and benefits director Steve Herbert says: “Despite the government’s announcement of significant support for household energy costs last week it is clear that millions of working people are already struggling financially.
“Inflation on everyday essentials is also very high and currently sits at almost five times the Bank of England’s target rate of 2 per cent, with increasing interest rates squeezing household budget ever tighter.
“Financially stressed employees are likely to be distracted and working at less than their maximum productivity, so by extension this is also a problem for employers too.”
Herbert added: “Whilst the appeal of a one-off payment is obvious, the reality is that the inflation crisis might persist not just through this winter – but perhaps as far as the middle of the decade. This raises the spectre of these payments having to be repeated, and I wonder how many organisations are financially robust enough to sustain such an approach, particularly if the Bank of England predictions of a year-long recession prove to be correct?”
Partners& says it would encourage employers to build a package of measures that also includes other elements to secure the financial wellbeing of their employees. With this in mind Partners& is launching a range of financial wellbeing tools, under a ‘four steps to financial health’ package this autumn with financial advice partners Integrity365. Further tools are expected to be available from early 2023.
Herbert says these services will aim to equip employees with tangible and useful discount options on everyday spending, as well as providing the basic knowledge and understanding to enable sensible and pragmatic financial decisions against the backdrop of the cost-of-living crisis.
Partners& research suggests that around a quarter (25 per cent) of employers already offer some financial education services, with around three in 10 (31 per cent) actively considering the introduction of such services in the autumn of 2022.