New research investigating how cost of living pressures are impacting the workforce has found that three-quarters of HR leaders fear the cost of living crisis is affecting employee performance.
In the survey of 500 UK HR Directors, carried out by employee money-saving platform Nous.co, 34% of HR leaders said they noticed a drop in productivity due to employees having other things on their minds. These concerns were echoed by the chief executive of Mental Health UK, who warned that the cost of living crisis was one of several factors fuelling stress, anxiety and burnout in the workforce.
The findings come as the cost of living data released by the ONS this month saw inflation rise to 4% and core inflation remain stagnant at 4.2%, with around 4 in 10 energy bill payers struggling to afford payments and a third struggling to pay their rent or mortgage.
The companies that manage this crisis best will be those that embrace the cost of living reality and take steps to improve employees’ financial well-being.
According to the survey, when HR leaders were asked what changes they had noticed in their workforce since the cost of living crisis began, 40% confirmed they believed employees were doing additional ‘life admin’ – for example, trying to find cheaper energy tariffs, or speaking to mortgage lenders – during working hours. A fifth of respondents (18%) believed their employees had taken annual leave to manage their bills as a direct result of increased pressure on household finances.
In response to the challenges presented by rising living costs, the study revealed that: 18% of HR leaders said their organisation had offered employees additional time off to support them through the cost of living crisis. A quarter (26%) were offering a workplace counselling service to staff and 30% were offering financial programmes to directly tackle cost of living challenges.
More than half (56%) of the HR leaders asked had increased salaries to support workers and 38% had given employees one-off support payments. This is despite ongoing fears that rising requests for pay rises could harm the profitability of businesses and contribute to ongoing inflationary pressures.
Greg Marsh, co-founder at Nous, said: “The cost of living crisis is far from over. Your employees are grappling with a tumultuous mortgage market and ever-increasing bills. This is going to be playing on their minds and their wallets, and we now know it is affecting their work. The companies that manage this crisis best will be those that embrace the cost of living reality and take steps to improve employees’ financial well-being. This includes helping teams manage ‘life admin’ effectively.”