How you can prepare for another cost-of-living crisis (and retain your employees)
The ongoing cost-of-living crisis continues to place significant pressure on employees across all sectors.
Rising prices for essentials such as food, energy, housing, and transport have left many workers struggling to make ends meet, even when in full-time employment. For employers, this presents both a challenge and an opportunity: a challenge to maintain morale and productivity, and an opportunity to demonstrate genuine care and support for their workforce.
We’ve outlined a series of proactive steps designed to protect your business and support your team. Here’s how you can ensure your people stay with you – and thrive – through challenging times.
Practical steps for tough times
1. Recognise the dual impact
The cost-of-living crisis affects both your business and your workforce. Employees may be facing increased financial stress, which can impact wellbeing, productivity, and retention. Acknowledging this helps you lead with empathy and make informed decisions.
2. Review and reduce costs strategically
Before making cuts that could affect your workforce, look at where you can reduce overheads:
- Switch to local suppliers to cut transport costs.
- Renegotiate contracts, especially energy and utilities.
- Cancel unused services or subscriptions.
These savings can be reinvested into employee support or business resilience.
3. Implement a financial wellbeing policy
Providing financial education and resources can help employees make better long-term decisions. Consider:
- Sharing links to free, confidential, and independent money advice services.
- Offering general sessions on budgeting, debt management, and financial planning (delivered by your finance team or external professionals).
- Providing written guides for those who prefer private learning.
Remember, personal financial advice is regulated, so keep sessions general and informative.
4. Introduce or enhance employee benefits and discount schemes
A comprehensive benefits package is cost-effective and helps position you as an employer of choice. Consider offering:
- Health screening, dental cover, life insurance
- Eye care vouchers, occupational sick pay, flu vaccinations
- Employee Assistance Programmes (EAPs)
Discounts can include:
- Restaurant and gym vouchers
- Cashback and gift cards for popular retailers
- 2-for-1 offers and family-friendly perks
5. Offer salary sacrifice schemes
Salary sacrifice allows employees to exchange part of their salary for non-cash benefits, which are often tax-free. Common options include:
- Pension contributions
- Childcare support
- Cycle-to-work schemes
- Electric vehicle leasing
These schemes are low-cost for employers and high impact for staff.
6. Provide one-off bonuses or vouchers
If ongoing pay increases aren’t feasible, consider offering a one-off bonus or vouchers. Grocery vouchers, for example, can help stretch salaries and show employees they’re valued.
7. Offer discounts on your own products or services
If you sell goods or services, consider offering staff discounts – and extending them to family and friends. Even small savings can make a big difference.
8. Support in-work progression
Help employees grow their skills and earning potential by:
- Providing access to training and development
- Creating clear career pathways
- Ensuring managers are equipped to support progression
This not only combats in-work poverty but also strengthens your workforce.
9. Prioritise mental health
Economic stress can take a toll on mental wellbeing. Support your team by:
- Training managers to spot signs of anxiety or depression
- Offering access to counselling or therapy
- Appointing mental health first aiders
- Providing a confidential EAP with 24/7 support
10. Organise social events
Socialising is often the first thing employees cut when budgets are tight. Hosting low-cost or free events – perhaps at your workplace – can boost morale and team cohesion.
11. Embrace flexible working
Flexible working arrangements can reduce commuting and childcare costs, improve work-life balance, and support career progression. Options include:
- Remote or hybrid working
- Compressed hours or flexitime
- Job sharing or annualised hours
Unsure how to handle flexible working requests under the new legislation? Sign up to our webinar for clear, expert guidance.
12. Provide bike storage and EV charging points
Help employees cut fuel costs by offering:
- Secure bike and scooter storage
- Charging points for electric vehicles
These facilities support sustainable travel and reduce commuting expenses.
13. Consider changing pay frequency
Monthly pay can lead to financial strain toward the end of the month. Offering weekly or bi-weekly pay gives employees more regular access to earnings and can ease cash flow anxiety.
Further advice and support
If you’d like tailored guidance on how to implement any of the strategies outlined in this article – from financial wellbeing policies to flexible working arrangements – our team is here to help.
For more specific advice on supporting your workforce through the cost-of-living crisis, reducing pay gaps, or building a more inclusive and resilient workplace, please call our Advice Line on 0345 073 0240 (selecting option 2). We’ll provide support that’s personalised to your organisation’s needs.
