Katie Jacobs, Senior Stakeholder Lead, CIPD Membership Department. 

News of the UK’s cost of living crisis has dominated the headlines since the Chancellor’s Spring Statement last week, with multiple stories of families having to choose between ‘freezing or starving’. An unholy mix of high inflation outstripping wage growth, incoming tax rises and surging energy costs means many are feeling the squeeze like never before. But even before the cost of living soared, one in eight workers were already classed as living in poverty.

While only government intervention will help to solve this crisis, there are actions responsible employers can take to improve the financial wellbeing of their workforce. According to recent CIPD research, one in five workers feel their employer is not doing enough to support their financial wellbeing, with more than a quarter reporting they do not earn enough to cope with a £300 emergency payment, so there is plenty of room for improvement.

But outside of financial wellbeing and even raising pay, there are plenty of good employment practices linked to high quality jobs that can help protect people from falling into or staying in poverty. Which of these five common HR practices are you already doing?

1. Embracing flexible working

While there are cases of people becoming stuck in low paid roles because they cannot afford to sacrifice the flexibility they have, an inclusive flexible working culture can help people balance work and homelife while earning a liveable income. Offering options like job-sharing, compressed hours, hybrid working and flexibility about start and end times can help lower barriers to entry to high paid roles for those who need flexibility. Where possible, letting people work from home or travel at quieter and non-peak times can help reduce the costs of commuting.

But it’s important employers recognise the distinction between flexibility and insecurity. Atypical working arrangements have their place when well-managed, with workers offered genuine choice about when to work, advanced notice of shifts and protection from or compensation for last minute shift cancellation. Flexibility must be mutually beneficial rather than one-sided, with people given the option where possible to flex their hours up if they need to bring in more income.

Research shows that a positive flexible working culture brings multiple business benefits around engagement, productivity and wellbeing, as well as helping attract talent.  

2. Supporting wellbeing

The pandemic has brought home how important it is to enable people to prioritise their wellbeing without being left out of pocket. Offering enhanced sick pay, for instance, enables and encourages people to stay home while unwell rather than coming into work and spreading germs. Responsible employers will make sure people have the opportunity to flex their hours to accommodate medical appointments, without fear of losing out in future.

A holistic wellbeing policy encompasses physical, mental and financial wellbeing. Having such a policy will help normalise conversations about financial wellbeing and help people feel more comfortable and less stigmatised in accessing support when they need it. Money worries have a direct impact on wellbeing and performance: 28% of employees report having money problems which affect their job performance due to lack of sleep, for example – rising to 34% of those earning less than £20,000.

3. Developing managers

An individual’s experience of work is inextricably linked with their experience of their manager. There’s a reason ‘people leave managers not jobs’ has become such a cliché. Skilled line managers are more likely to support a culture of true flexibility, as they’ll be more comfortable judging on outputs. Supporting line managers to have more effective career conversations and to effectively manage performance, whether remote, in-person or hybrid, means they’ll be  better equipped to help their teams progress into higher skilled and higher paid roles.

Supporting the wellbeing of their team should be a KPI for every manager, and people professionals need to ensure that managers are checking in with staff regularly on wellbeing, including financial wellbeing. It’s by no means a given in most organisations: a recent survey from Mental Health First Aid England found 48% of staff reported receiving no wellbeing check-ins from their employer in the past year.

4. Offering routes to progression

People can get stuck in low paid roles, with employers often neglecting the training and development of those on less secure or permanent contracts. People professionals have a responsibility to create, communicate and enable clear routes to progression, investing in targeted training and development that helps everyone fulfil their potential. Clearly linking pathways to pay will help people see what they need to do to progress. Offering opportunities for people to shadow others in senior roles or providing them with a mentor can help raise aspirations as well as remove some of the barriers so many people face.

With most organisations and sectors facing a talent squeeze, the benefits of developing in-house talent is clear. Investing in developing your workforce all pays back in improved retention, loyalty and engagement.

5. Making reward accessible

It should go without saying that providing a fair and liveable wage, such as paying at or above the Real Living Wage where possible, is integral to being a responsible business and helping people avoid in-work poverty. The pay setting process should be transparent so everyone can see what it takes to secure a pay rise and understand how pay is set. Job vacancies should clearly advertise salary and wage ranges. Engage with employee representative groups and unions and keep an eye on any pay gaps that exist (for example by gender or ethnicity).

But reward is about more than basic pay. Providing the right benefits can help offset the ‘poverty premium’ (the fact low-income households pay more for essential goods and services), increase your people’s spending power and protect them from financial shocks. A well-structured benefits package might include things like rental deposit schemes, technology loans, subsidised childcare, paid time-off for caring responsibilities, season ticket loans and access to discounted retail and leisure perks. Some employers even offer employee crisis loans, while 14% of employers now offer some or all of their employees early access to pay.

Whatever is in your benefits package, communicating it regularly and making it easily accessible (not just via an online portal, for instance) is critical.

To find out more about the ways in which employers can make work a more reliable route out of poverty, visit our new ‘Tackling in-work poverty’ web hub, which we’ve created in collaboration with the Joseph Rowntree Foundation.