Employers concerned about employee financial wellbeing amid cost of living crisis

With inflation close to a 40-year high and living costs continuing to rise, new research highlights growing concerns about employee financial wellbeing.

In a survey of more than 160 senior HR, finance, payroll and C-suite professionals by national intermediary Partners&, nine in 10 employers said that they expect either a small (38%) or significant (52%) increase in the number of their employees experiencing financial difficulties this winter. Almost two thirds (65%) of organisations are already aware of employees struggling financially.

Despite government support for household energy costs it is clear that millions of working people are already struggling financially, said Steve Herbert, Wellbeing and Benefits director at Partners&. In addition to rising costs for energy, household budgets are also being squeezed by inflation on everyday essentials and increasing interest rates.

“This is primarily a problem for employees and their families, but it is also worth remembering that 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 said.

As some organisations seek to help their workers with a one-off cost of living payment, the research showed that a third of employers have already made (11%), agreed to make (3%) or are considering making (19%) such a payment to support their employees through the crisis. This is not an affordable option for every business, however.

Partners& recommended that employers build a package of measures that also includes other elements to secure financial wellbeing for employees, such as discount options on everyday spending and financial education.

Generation Z (aged up to 26) and Millennials/Generation Y (aged 27-45) are the demographics that employers are most concerned about when it comes to stress and anxiety related to finances and debt, according to separate research by GRiD, the industry body for the group risk protection sector.

The biggest worry employers have for Generation X (aged 46-57) is stress related to work, and for the Baby Boomer generation (aged 58-76) employers are most concerned about a lack of fitness caused by a non-active lifestyle.

GRiD said that while it is important to acknowledge the differences in the generations, employers should provide support through employee benefits across all areas of wellbeing for all generations.

“Although statistics can predict generalisations for an entire workforce, they can’t forecast which issues might impact an individual employee and what support they might need,” explained Katharine Moxham, spokesperson for the industry body. “By ensuring employee benefits cover all areas of health and wellbeing — financial, physical, mental and social — no employee will be left lacking in their hour of need.”