Can employers afford to buy their way out of financial stress?
Can employers afford to buy their way out of financial stress?
Around 70% of employees at Rolls-Royce Holdings have received a big helping hand in dealing with financial worries caused by high inflation: a bonus and a backdated wage increase that adds up to a 9% rise. Thousands of other staff are to be given a one-off cash lump sum.
The extra staff payments are expected to cost Rolls-Royce more than £40 million.
Bills, bills, bills
The financial intervention comes at a time when all UK employees are facing a challenge to their household budgets, from sky-high energy and petrol bills, higher National Insurance payments and a general increase in prices. As a result, more people are switching jobs for higher pay, taking on more hours and working through periods of sickness.
Research by software firm CIPHR among 1,000 UK workers showed 12% had moved to better paid roles; 31% had worked longer hours or shifts because of financial worries; 12% had taken on a second job. 26% of men and 18% of women had asked for a pay rise to help cope.12% had asked for improved benefits.
How much for advice?
EAPA UK chair Eugene Farrell said: “In this new crisis for the world, every extra piece of financial support from employers is going to be a relief, particularly for staff on lower incomes. But it’s not the long-term solution. Bigger payouts only fuel inflation and the cycle goes on.
“Few employers are going to be in a position to keep up with inflation this year. And what happens next year, and the year after if levels are still high?
“Retention shouldn’t be reduced to a matter of cash. HR has to find ways to be smarter about helping people with their financial stress, encouraging engagement and loyalty. EAP services don’t involve any new costs for employers. They are an obvious and practical means of supporting people in the right ways, helping them come to terms with changes in finances, appreciate the implications, and be stronger for the long-term.”


