The rising cost of living has been in the headlines for the past few months, with many households now facing increasingly grim and difficult circumstances. According to the Office for National Statistics (ONS), 87% of UK adults reported an increase in their cost of living in April 2022. As a result, many families are now struggling to meet the cost of basic necessities such as heating or food. , with media reports filled with case studies of families where parents sacrifice meals daily to feed their children.
Unlike previous recessions and economic crises, the current rise in the cost of living is affecting households from a wide range of economic backgrounds. While the average wage (excluding bonuses) rose by 4.2%, according to ONS data, when offset by the impact of inflation, wage growth in real terms fell by 1 .2%
So what does this mean for employers? Employees who are under financial pressure are likely to bring the associated stress with them to work, which could impact productivity and affect their mental well-being. Meanwhile, those who frequently skip meals can also impact their physical well-being.
Unsurprisingly, this appears to be an issue employers are taking seriously. According to research from Willis Towers Watson, published this week, just under a third (31%) of employers plan to take action to help staff cope with the challenges of rising inflation and the cost of life. Within this group, the most popular measures are reviewing salaries more frequently than an annual review (14%), promoting the use of existing benefits, such as discounts on insurance coverage (13 %) and support for financial well-being.
In the past few weeks alone, we have reported that organizations such as Arriva, the BBC and KPMG are increasing salaries for employees.
But will employers come under increasing pressure to do more as the crisis continues? And how sustainable are these measures in the long term, when companies also face rising costs?