A problem in the cost of living has an impact on both the physical and emotional health of workers. 52% of therapists say that their patients have problems sleeping or have sleeplessness as a result of financial concerns. In addition, workers who are distracted from their task are unable to concentrate on it.
The decline in productivity has the knock-on effect of lowering output as well as sales and profits. As an employer, you have the ability to make difficult economic circumstances more pleasant for your workforce. Because you actually care about how they are doing, you will not only be helping them, but also yourself, your company, and its bottom line. If your workers are well compensated, it is likely that they will be distracted by the increasing expenditures.
The effects of hyperinflation on enterprises are negative, and rising prices have an effect on everyone, but those with fixed incomes are particularly hard hit.
Getting Through The Cost of Living Crisis
Let’s have a look at some of the ways in which your company may assist its employees in overcoming the effects of the rising cost of living, including the following:
- Employee financial well-being strategy
- Understanding the cost of living is happening
- Planning and Preparation
The cost of living crisis has been going on for years, and it’s getting worse. It affects everyone in different ways, but there are things that you can do to help yourself and your employees cope with this issue.
What we do now is when disposable income is stretched, it’s the activities that help to reduce stress and improve mental and physical fitness that are reduced or foregone completely. A lack of funds forces people to cut discretionary spending like a gym membership. Engaging in physical activities improves the quality of sleep and reduces mental stress. Chemicals like endorphins and serotonin are renowned for improving mental fitness and well-being.
When workers are stressed, their financial worries can be brought into the workplace. Businesses suffer when workers are hindered by the following:
- High levels of distraction
- Lower productivity and work ethic
- Poor and inconsistent task performance
Because of this, no company can afford to disregard the mental health or overall well-being of their employees. As a business owner or people manager, your employees’ mental fitness should be top-of-mind for brand reputation, customer acquisition and continuity, as well as employee retention and attrition. As a result, you need to establish a strategy for the financial well-being of your employees that can assist in providing protection for them during this challenging period.
Employee financial well-being strategy
How can you ensure that your employees are protected from the rising cost of living? Your company can advance its operations in a number ways, including the following:
- Income protection and health insurance
- Pension contributions
- Employee employment incentives
- Financial advisor and investment education
Financial protection
How can you ensure that your employees are protected from the rising cost of living? Your company can advance its operations in a number ways, including the following:
Pension contributions
Because of the state of the economy, many younger people are deciding without participating in employment pension plans in order to save additional savings. In point of fact, somewhere about 34% of workers have already opted out or are seriously contemplating doing so. However, in the long term, this is detrimental to your employees, therefore you may want to think about raising employer payments to workplace pensions in order to provide greater value for employees.
Employee benefits
It is possible that it may be beneficial for your company to reevaluate its perks package, which may include loyalty reward programmes, access to gym facilities, or discount programmes. Enhancing the benefits package is one way to insulate your employees from the effects of economic uncertainty. This is especially true in terms of providing cost savings on items such as food purchased from Costco, for instance.
Access to financial support and advice
Some people are finding the present crisis to be difficult and perplexing, and as a result, it would be beneficial for your staff to have access to expert guidance regarding what they should do in these kinds of circumstances. Employees who are having trouble keeping track of their own money may benefit from this, and having a professional to whom they can direct their inquiries and to whom they can turn for guidance can make their life much simpler.
Give advice on determining how much money is spent each month on things like rent or the repayment of a house loan, utilities, food, transportation, insurance, and taxes, among other things, and provide an estimate of that amount. Then the question becomes how to construct a budget so that they may live within the limitations of their pay.
Encourage open communication about money
Because there is a stigma attached to having debt or other financial problems, many people feel too embarrassed or humiliated to ask for assistance from other people. You can take a step in the right direction toward protecting your employees by encouraging them to seek the financial services and support they require by providing them with an environment in which they feel safe and at ease to have open and honest conversations about money. This environment should be safe and comfortable.
Understanding Why The Cost of Living Crisis is Happening
The dilemma brought on by the rising expense of living can be attributed to a few different factors. We are currently living in an environment where businesses are fighting for their very existence owing to the epidemic and problems with the supply chain. In addition, technology has made our life simpler by giving us the opportunity to work from home. Consider the companies that were able to thrive because their employees need services such as transport, meals, professional dress, etc. When people are at home, they have a tendency to spend less money.
It may be argued that the government is not doing enough to assist those who operate small businesses. When individuals have less money available for discretionary spending, it can lead to a rapid and severe fall in the number of customers and revenue for firms that provide goods or services that rely on the workers’ discretionary income.
Build an emergency fund
To be successful in spite of the challenging market conditions, you should prioritise the establishment of an emergency fund with deeper pockets. Make use of it to assist employees who are having trouble meeting their transportation expenditures.
You might also think about moving your company to a more affordable area, or you could offer your employees a city loading or a cost of living monthly charge as an alternative.
Summing Up
Although the problem of the expense of living is not new, hyperinflation is something that younger employees have not yet encountered. The mental health and well-being of your employees will improve if you are aware of the effects that the rising expense of living is having on them and the ways in which your company may mitigate those effects. There is an old proverb that says something like this: “Tough times don’t last, but tough people do.”