How much can employers really do?
Work can and should be a reliable route out of poverty. But for 1 in 8 workers in the UK, it’s not. Lots of factors are to blame, and policy makers undoubtedly have an important role to play in addressing such concerns as our social security system, affordable childcare provision, consumer protection, or the rising cost of living. But employers can and should also do their bit to make work a more reliable route out of poverty.
Employers themselves agree: an overwhelming majority of respondents in the CIPD’s latest reward management survey (to be published March 2022) believe organisations should:
- provide a fair and liveable wage (96%)
- support in-work progression to help people increase their earning potential (87%)
- support financial wellbeing by offering and signposting benefits and financial education (71%).
The most important thing is helping employees to feel invested in the workplace and have a sense of shared purpose. One of my bosses really cared about our circumstances outside of work. It struck me how important that is. It’s almost beyond treating people with dignity and respect – it’s about recognising them for who they are.
Hugh, former agency worker working with JRF to co-design better jobs
Why should employers act?
Supporting your people to achieve a decent standard of living is an essential element of good work and responsible business. The moral case for supporting financial wellbeing is clear. But there’s a compelling business case too:
- Research shows, that when we’re worried about money, our work suffers.
- Normalising conversations about money worries helps people feel more confident and empowered, and more ready to face what life and work throws at them.
- Employees with access to financial wellness programmes report feeling more focused on their job and more positive about coming to work and being part of their organisation.
- Businesses who pay the voluntary real Living Wage report several business benefits, including improved recruitment and retention and better relations between staff and managers.
There’s a clear case for taking action to understand and support employee financial wellbeing, making it an integral part of creating a healthy workplace where people can flourish, reach their potential and make a significant contribution to their organisation’s performance. There’s also of course the ethical argument: it’s simply the right thing to do. It’s about responsible business.
Chief Executive Officer, CIPD, on why employee financial wellbeing matters
What if we can’t afford to pay more?
The most obvious role employers can play in tackling poverty is to pay a wage that covers the real cost of living. But with inflation and energy prices growing at worrying rates, this will be easier said than done. But there’s a whole host of other good employment practices that can also help protect people from poverty – with far-reaching benefits for the workforce and organisation as a whole.
We’re asking all employers to consider and implement a three-strand financial wellbeing policy that minimises in-work poverty. The information over the next few pages explains how you can make a tangible difference in these three key areas of HR practice:
By paying a fair and liveable wage, you can help your workforce meet a decent standard of living
Helping your people to escape poverty needn’t cost a penny
You can maximise your employees’ earning potential by developing the skills they need to take on higher-paid roles