Will the energy crisis fuel interest in workplace financial wellbeing?

By Charles Cotton, Senior Policy Advisor at the CIPD. 

Just as we see started to see the end of the coronavirus pandemic, the UK’s great cost of living crisis starts to come into view – bringing with it a new source of stress and anxiety for us all, and a new impetus for employers to support our wellbeing.

We are witnessing the impact of soaring energy and fuel costs on prices. Furthermore, organisations such as the OECD, Heinz, and Chartered Institute for Procurement and Supply are all predicting that we’ll also be paying more for our goods and services in the coming months. The Bank of England forecasts that CPI inflation could be higher than its official target of 2% for the next three years.

While the past few months have seen large increases in wages for some UK workers, these have been focused in certain occupations and economic sectors. For most, pay rises will have been moderate, while many of those in the public sector are experiencing a ‘pause’ in their pay.


How can HR professionals help their organisations manage and mitigate the risk of a rise in workforce financial distress?
Research shows that financial stress can have a negative impact on workers in terms of their wellbeing and performance. Not only do people suffer, but so too can employers, customers, and investors.

Will soaring energy prices encourage more organisations to explore how they can support their workforce’s financial wellbeing? That is something we aim to answer through this year’s CIPD reward management survey, which I encourage you to complete. It doesn’t take long to answer our questions and you could win a Google Hub Nest Max.

We’re hoping the survey will show an increase in the number of employers who have a financial wellbeing policy in place (according to last year’s survey, more than half already did).  Ideally, those policies would be aligned and integrated with the employer’s mental and physical wellbeing strategy.

The financial wellbeing approach should look at the activities that the organisation can undertake to help reduce the risk of someone falling into poverty or suffering ill health due to money worries. For example, it should outline the organisation’s commitment to  paying a fair and liveable wage, and the support available to those who do fall into difficulties (such as financial education, credit counselling or hardship loans). Find out more about workplace financial wellbeing on the CIPD website.

If your organisation doesn’t have a policy, but wants to do something quickly to support your workers during the energy crisis, you can signpost sources of useful information, such as Money Helper, Citizens Advice, Fuel Poverty Action, National Energy Action, or, if in Scotland, Energy Action Scotland.

You can also help your organisation assess what people think and feel about the situation, such as through a confidential poll or by starting a discussion on your intranet, to help evaluate what’s needed and what’s possible given constraints such as money or time. It’s important to encourage individuals to be open and honest about their financial concerns as early as possible. The sooner they talk about the problem, the quicker you can suggest possible help. If it’s left too late, then the situation may have grown so much that little can be done.



How can HR professionals help their employees reduce their energy consumption?

Perhaps one of the most obvious ways to mitigate the stress and anxiety that comes with high energy prices is to help people to moderate their energy consumption. There’s an opportunity now for HR teams to help their workforces discuss ways of using less energy to heat and light their homes, many of which are not particularly energy efficient.

Some ways of reducing consumption are quick to do and are relatively cheap, such as turning off standby appliances, turning down thermostats, or washing clothes at a lower temperature. While each of these savings is small, combined they can be significant. It’s also quick and easy for HR to highlight these simple key ways to save energy at home to staff worried about their costs, such as through the intranet or hosting a staff webinar that explores this issue. However, care must be taken to use the right tone of language, so employees don’t see the suggestions as condescending or patronising. Some low paid workers may already be doing everything they can to minimise their costs.

However, once the quick and cheap solutions have been adopted, the other longer-term ways of cutting costs are more expensive, such as installing a new energy efficient boiler, roof insulation, or double-glazing cost money. In these circumstances, it might be worth considering whether your employees would appreciate and value employer benefits that help with the cost of these. Such as negotiating preferential prices or loans for these improvements.  Not only might this help with employee financial wellbeing and the employer brand, it might also enhance the organisation’s environmental sustainability and climate change strategy, which should improve its investment and customer reputation.

What you can do now….

  1. Start a dialogue with employees about their concerns – next month’s Talk Money Week is an ideal opportunity.
  2. Signpost information and guidance about dealing with energy bills.
  3. Share energy saving tips.

 

….. and in the future

  1. Create a financial wellbeing policy that’s aligned to your physical and mental wellbeing policies.
  2. Ensure your financial wellbeing policy tackles both the causes and symptoms of financial distress.
  3. Consider offering benefits that help staff cut their energy usage.

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