As employers are becoming more aware of the impact of the cost of living crisis on their staff, the majority expect a rise in the number of employees experiencing financial difficulties this winter, research has found.
A survey of more than 160 senior HR, finance, payroll, and C-suite professionals, undertaken by Partners&, found that nine in 10 employers (90 per cent) expected either a small (38 per cent) or significant (52 per cent) increase in the number of staff facing financial difficulties this winter.
In addition, the same survey revealed that two-thirds (65 per cent) of organisations were already aware of employees struggling financially.
As some employers seek to help their workers with a one-off cost of living payment, the research showed that a third of employers (33 per cent) have already made (11 per cent), agreed to make (3 per cent), or were considering making (19 per cent) such payment to support staff through the crisis.
However, some employers were not in a position to take such a step, with a quarter (25 per cent) of workers indicating that their employer could not currently afford to make a support payment.
And, while the new prime minister Liz Truss announced “significant” support for household energy costs, which should keep most household energy bills around their current levels, Steve Herbert, wellbeing and benefits director at Partners&, said this might not be enough.
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“It is likely that single-income households earning the national minimum wage, national living wage, or even the voluntary real living wage, may already fall within the widely accepted definition of fuel poverty,” he warned.
And while emphasising this was primarily a problem for employees and their families, Herbert noted that it was also worth remembering that “financially stressed employees are likely to be distracted and working at less than their maximum productivity”, so this was also a problem for employers.
A separate study by the Living Wage Foundation and Survation, which polled more than 2,000 workers earning less than the real living wage, also found that the record-high inflation combined with low wages was hitting Britain’s 4.8 million low-paid workers harder than anything they have faced before, according to three-quarter (78 per cent) of them.
In addition, the same study found that as the situation was worsening, almost three in five (56 per cent) – an estimated 2.7 million workers – reported using a food bank in the past 12 months, with two-thirds (63 per cent) of low-paid workers – an estimated 1.7 million people – who use food banks saying their frequency has increased.
In addition, low-paid workers have reported having their quality of life significantly impacted by the situation, with more than two-thirds (69 per cent) disclosing that low pay negatively affected their levels of anxiety and overall quality of life (up from 43 per cent and 42 per cent in January 2022 respectively).
Katherine Chapman, director of the Living Wage Foundation, said that while everyone was feeling the pressure from soaring inflation, figures showed that low-paid workers were being hit harder than most.
“It’s more important than ever that those employers who can, step up and provide a wage based on the cost of living, joining over 11,000 living wage employers across the UK,” she said.