The rising cost of living has dominated headlines over the past few months, with many households now facing increasingly bleak and difficult circumstances. According to the Office for National Statistics (ONS), 87% of UK adults reported a rise in their cost of living in April 2022. As a result, many families now find themselves struggling to meet the cost of everyday essentials such as heating or food, with media reports full of case studies of families where parents sacrifice meals on a daily basis in order to feed their children.
Unlike previous recessions and economic crises, the current rising cost of living affects households from a broad range of economic backgrounds. While the average wage (excluding bonuses) has grown by 4.2%, according to ONS data, when counteracted with the impact of inflation, pay growth in real terms fell by 1.2%
So, what does this mean for employers? Employees that are experiencing financial pressures are likely to bring the associated stress with them to work, potentially impacting productivity and affecting their mental wellbeing. Those frequently skipping meals, meanwhile, may also experience impact to their physical wellbeing.
Not surprisingly, this appears to be an issue employers are taking seriously. According to research by Willis Towers Watson, published this week, just under a third (31%) of employers plan to take some measures to help staff deal with the challenges of rising inflation and living costs. Among this group, the most popular measures are reviewing pay more frequently than an annual review (14%), promoting the use of existing benefits, such as insurance cover discounts (13%) and providing financial wellbeing support.
In the past few weeks alone, we have reported on organisations including Arriva, the BBC and KPMG increasing pay for employees.
But will employers find themselves under increasing pressure to do more as the crisis continues? And how sustainable are such measures in the long term, when businesses are also facing rising costs?