New research investigating how cost of living pressures are impacting the workforce has found that three quarters (74%) 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, a third (34%) of HR leaders said they’d noticed a drop in productivity due to employees having other things on their minds.
Three quarters (74%) said the cost of living crisis was directly affecting employee performance.
These concerns were echoed by the chief executive of Mental Health UK last week, who warned that the cost of living crisis was one of a number of factors fuelling stress, anxiety and burnout in the workforce.
The findings come as 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 finding it difficult to pay their rent or mortgage.
Employees doing “life admin” on company time
According to the Nous survey, two in five HR leaders believe employees are doing additional ‘life admin’ on company time specifically due to recent cost of living pressures.
When asked what changes they’d noticed in their workforce since the cost of living crisis began, 40% of respondents confirmed that they believed employees were doing additional life admin – for example, trying to find cheaper energy tariffs, or speaking to mortgage lenders – during the working day.
A fifth of respondents (18%) believed employees at their companies had taken annual leave to manage their bills as a direct result of increased pressure on household finances.
Employers respond to financial challenges faced by staff
In response to the challenges presented by rising living costs:
- A fifth (18%) of HR leaders surveyed by Nous 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 just under a third (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
- 2 in 5 (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, cost of living expert and 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 wellbeing. This includes helping teams manage “life admin” effectively.
“Any employer who thinks their employees aren’t doing life admin on company time is burying their head in the sand. Some of that is inevitable. But tools like ours can significantly improve things so it doesn’t impact employee performance.
“Rather than turning a blind eye, look at tools that improve the financial health of your team via practical solutions that make everyone better off, and which help ease the admin burden associated with bills, mortgages and switching contracts.
Lizzie Paterson is Chief of Staff at VenueScanner. The company offered free Nous membership to their employees in order to support them with the rising cost of living. She said:
“We know that the cost of living crisis is a source of stress and worry for our team, and it’s important to us as a business to offer effective support that solves people’s problems at the source.
“The key for us was to focus on a solution that helped people make their money go further – without adding to their to-do lists. We also wanted to make sure every member of the team could benefit.
“That meant Nous was an ideal fit for us. As well as delivering savings for the team it lifts the admin burden, freeing up time and headspace that people would otherwise have to dedicate to sorting their bills.”