As the cost-of-living continues to rise, employers need to find different ways to help their people.

Many employers will be responding to the cost-of-living crisis with a predicted 5% wage hike over 2023. Unfortunately, this won’t make wages inflation proof. Any further pay rises won’t be a financially sustainable option for  many organisations either.

That said, there are still plenty of non-pay-based options that employers can use to at least try and bridge the gap between salaries and rising costs. These options do need to be framed within the context of a coherent plan though – and one that is designed meet both immediate and longer-term needs.

Here’s what HR can do to boost financial support for employees in 2023:

Week 1: Develop rapid response initiatives

Start with a small gesture to show the business cares. Keep solutions simple. This crisis is about getting more money into staff pockets as quickly, easily and securely as possible.

Coping with rising food and energy costs is the number one priority for many employees, so it makes sense to focus your first tranche of support here.

Then identify other quick wins to help reduce costs for employees. Look at what you can do to support the cost of work - including travel, lunch and heating for home workers. Solutions that can help here include pre-paid cards that employees can use for an intended purpose (such as buying food or meals out). Other practical options include expanding and tailoring employee discount schemes with retail discount options that meet people’s most pressing needs.

First month

Rapid response to a crisis is crucial. But it’s also Important to show a considered response as part of your employee value proposition. Businesses must demonstrate through their actions that they have really thought about the predicament staff are in, and  proactively respond with empathy and practical support.

Next, review  your current offerings through a cost-of-living lens to identify which benefits will deliver greatest value to employees and the business.

Survey staff to ask what support they most need and uncover any gaps in current provision. Don’t make assumptions about what support they need. Leaders will likely be cushioned from the worst impact. Make sure you ask staff across all pay levels how they are impacted and what help they would most value.

 Equipped with this information you will be in a position to pull together a comprehensive package of support. Employee and business needs vary, meaning a one-size-fits all solution won’t be appropriate. Instead, take time to agree core design principles appropriate to your business. These might include:

Flexibility: Employers need to be able to adjust support in line with changing circumstances and ramp support up or down. This might include the ability to provide immediate, short-term assistance as well as longer term support. It might also mean providing means-tested or discretionary support, or one off or repeat payments.

Digital first: Many employees are now working in hybrid or remote patterns. Adopting a digital first approach will help most organisations deliver the support their workforces need in this context quickly, safely and securely.

Inbuilt risk-assessment: The problem with some responses to the cost-of -living crisis is that they that have unintended consequences. For some low-wage workers, for example, a one-off payment will likely trigger a subsequent cut in benefits for workers on universal credit or other state benefits. Similarly, unionised environments have clear rules around benefits. Awareness of such risk will need to be a core component of response plans for many organisations

Over the coming months

In a fast changing economic and political environment, it is inevitable that employers will need to adapt support over the coming year. Longer term, this will mean employers will also need to make sure they are monitoring the impact and shortfalls  of their cost-of-living response measures as the crisis evolves. This will be especially important for justifying any further adaptions needed to senior leaders.

It is also important to create a cost-of-living focused comms plan. Even the best thought through support will only be effective if staff use it. What are the key messages staff need to understand to use the support effectively? Do staff understand how a specific benefit will advantage them? Do they know where and how to access support?

Even if you are repurposing existing or external support, the best way to provide answers to these questions is through a cost-of-living hub. This acts as a visual reminder the employer cares and makes it easier for staff to access support in one place. A regular comms schedule driven through the hub will also help to maintain a steady drumbeat to remind staff to continue to use the support on offer.

Conclusion

Businesses are operating in a fast changing political and economic environment. Employers don’t know what challenges lie ahead for the business and employees, just that there will very likely be more to come. By having both an immediate and continuously improving plan in place, HR and leaders can be confident staff are well supported by the business. In turn, employees will  be proud to work for a supportive employer.