The vast majority (90 per cent) of employers expect at least some of their workforce to be in fuel poverty when the next domestic fuel price rises take hold, new research has found.
In addition, the Partners& survey of 169 HR, finance and C-suite leaders, who collectively represent almost 189,000 workers, found that almost all employers (97 per cent) thought employees' financial difficulties would increase heading into 2023.
With fuel poverty widely defined as any household spending more than 10 per cent of its income on energy usage and the energy price guarantee set to rise to £3,000 from April, households earning less than £30,000 could soon fall into this category.
Almost two thirds (59 per cent) of the organisations surveyed said they employed at least some workers on salaries of less than £30,000, with one in four employers (24 per cent) paying most of their workforce less than this.
But rising energy prices are not employees' only financial concern. The data found two thirds (62 per cent) of businesses believe that the combined impact of rocketing inflation and high interest rates poses the biggest issue for workers.
The cost of living crisis was perceived to be the single biggest financial challenge going into 2023, with 31 per cent of survey respondents citing this.
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Kate Bell, head of economics at the TUC, said that, with the rising energy price guarantee in mind, wage increases should be a business priority: “The most important thing employers should do is prioritise pay rises that help their staff keep up with the cost of living. This should include sitting down to negotiate pay with staff and their unions.”
Bell added that, outside of pay rises, being open to flexible working, ensuring clear communication around shift patterns and giving transport loans were also ways employers could help employees.
Samantha O’Sullivan, policy lead at the Chartered Institute of Payroll Professionals, said other options included providing paid-for meals at work, giving employees access to an EAP, delivering discount schemes and offering salary sacrifice initiatives. “It’s easy to forget that employers are also feeling the pinch and paying employees additional cash comes with a tax and national insurance liability, as well as a potential impact on employees’ eligibility to universal credit, so it's not as straightforward as it seems,” she added.
If businesses decided that pay rises were the right way forward, Sandi Wassmer, CEO of the Employers Network for Equality & Inclusion, suggested these be targeted and work to improve in-work fairness. “It is essential to ensure that those who are the hardest hit get as much benefit as possible, while also maintaining salary benchmarks at the appropriate levels,” she said.
With a holistic view of employee finances linking fair compensation to progression, wellbeing and in-work performance, Charles Cotton, senior reward adviser at the CIPD, said current employer worries about the workforce’s financial health should get them thinking about suitable long-term responses: “The CIPD is encouraging organisations to explore what steps they can take to support their staff over this challenging period.
“Ideally, this should be brought together as a financial wellbeing policy. Our research highlights that having such a policy can also be beneficial to boost employee wellbeing and work performance.”