REWARD
Supporting staff through the cost-of-living crisis
Danny Done, managing director of Portfolio Payroll , discusses the cost- of-living crisis, considering both the employee and the employer perspective
T he ongoing cost-of-living crisis has put significant pressure on household incomes, with many turning to their employer to facilitate higher wages to offset soaring expenses. While a pay rise is, undoubtedly, the best solution to this problem, in many cases, employers will be experiencing equal struggles and concerns, so may not be able to offer financial assistance. However, it’s important to remember they can provide support in other ways and should keep the financial well-being of their workforce at the top of their priority list. Increases and bonuses Where possible, a salary increase or bonus payment will likely provide the most relief and benefit to employees. Should this be given, it’s useful to specify how, and when, the increase will apply. Similarly, employers should be clear that it’s a one-off payment in recognition of the financial struggles employees have, but doesn’t form a contractual, nor a recurring, arrangement. Should there already be a contractual entitlement to a regular pay review or pay increase period, employers should ensure this is adhered to. The same should apply where the contract includes a non- discretionary bonus payment. Failure to abide by the contractual terms can lead to claims for breach of contract and will likely hinder employee relations. This may lead to a reduction in productivity and higher turnover rates, causing further troubles for businesses. Employers may be able to renegotiate contractual terms and conditions, to remove or delay a scheduled pay increase or bonus payment. However, to do so, they must ensure they complete a full consultation period with affected employees and exhaust all other cost saving measures. Working from home? The cost benefits to working from home
reassured they’re receiving what they should be. Such training sessions can be expanded to include further guidance on budgeting, financial planning, debt repayments and more. For businesses, cost saving measures will be of equal importance. Although one may implement all the measures outlined above, it’s still likely they’ll have to look at their own outgoings and make some difficult decisions, to ensure the long-term viability of the organisation. Before jumping straight to changing terms and conditions or considering redundancies, there are some simple steps employers can take to reduce their expenditure. Firstly, employers should ensure there are processes in place to track the amount of annual leave employees have taken. Where they have gone over their allowance, monies can be recouped. Similarly, should an employee leave the organisation with annual leave still to take, employers can require that they use it during their notice period, to avoid paying for both holiday pay and notice pay separately. Where equipment has been provided to staff (e.g., laptop, phone etc), an effective check-in / check-out system ensures all property is returned. A policy on damages can outline any deductions which will be made to staff wages in the event they return equipment in unsatisfactory conditions. Finally, reducing availability of overtime, freezing recruitment and introducing clear training agreements can help reduce business expenses. Human resource and payroll teams should work with senior management to develop a plan which supports employees while also safeguarding the business. Such a future proofing strategy will, no doubt, help protect businesses and their staff during turbulent times. n
were among the reasons employees enjoyed doing so throughout the Covid pandemic – they were able to save on commuting expenses, reduce childcare fees and live in cheaper areas. Many also believed it provided a better work-life balance. However, as household bills now climb, homeworking may no longer be an attractive prospect. For some homeworkers, returning to the office may be a useful way to save on energy bills. Where this isn’t possible, employers might want to consider providing a homeworking allowance, to ease the financial pressures associated with working from home, especially through the winter months. For other on- site workers, commuting expenses may be more of an issue. In these circumstances, providing travel ticket loans or free parking can help reduce their overall outgoings. The introduction of hybrid or flexible working can also reduce overall expenses. This may be done through the offering of flexi-hours, compressed hours or reducing working time. Further initiatives employers may wish to consider, and to ensure they are providing adequate support to employees is offering an employee assistance programme, introducing rewards and benefits programmes, providing free on- site meals and refreshments and providing financial literacy and education sessions. Payslip education Employees often don’t understand the various sections of their payslip, meaning they’re not confident asking questions or raising concerns if they believe there has been a mistake with their wages. This lack of confidence can, however, cause issues to fester and problems to escalate, leading ultimately to grievances and resignations. By providing training workshops to employees about the processes involved with creating a payslip and inputting the necessary information, employees are
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 44
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