As the cost-of-living crisis continues to get the headlines and with families seeing rising costs more and more people of working age are struggling. Some people may assume those living in poverty are unemployed, however a study by the ‘DWP’ in 2020 found that 70% of households where at least one adult was working, were living in poverty, which is also called ‘in-work poverty’, an increase of 10% on the previous decade. In September 2022, ‘Resolution Foundation’ estimated that “poverty will increase by over 3 million people between 2021/21 and 2022/23.”
Defining ‘In-Work Poverty
CIPD defines In-Work Poverty as a circumstance “When a working person’s income, after housing costs, isless than 60% of the national average, therefore they don’t earn enough to meet the cost of living and they are living in poverty.” Those in low paid sectors, minority ethnicities, carers and single-parent households are those who may be most affected.
The Government announced in September 2022 that from January 2023, part-time workers who work less than 15 hours per week at the rate of national minimum wage may face having their Universal Credit sanctioned if they do not seek additional employment with the help of an assigned work coach. Whilst seeking additional employment may increase the income for certain households, there may be some people such as single parents, who are forced to pay for additional childcare to enable them to work more, something that may not prove to be financially beneficial. In turn, employers across the UK may see a spike in employees suffering with stress and mental health issues.
Ways You Can Support Your Employees
Anyone who could wave a magic wand and make poverty disappear would. However, in reality, this is not possible. But here are a few things we think are possible, in supporting your employees suffering from in-work poverty.
Ensure You are Paying a Fair Wage
- Always research the market and ensure you are paying in line with your local competitors to avoid losing employees to a competitor who is offering more money. Where you may not be able to offer higher salaries, providing it fits within your budgets, consider offering additional perks such as providing hot meals at lunchtime.
- If tempted to offer a cost of living payment or similar and we know many employers have, consider what will happen when the payment is withdrawn and whether it may be better to give one larger payment next year than several smaller payments now.
Employee Assistance Programmes
- Promote Your Employee Assistance Programme (EAP) – If you have an EAP, ensure you are reminding your employees to make use of it. EAP’s are an employee benefit that offer employees’ access to a 24/7 helpline where they can discuss issues they may be having both in and outside of work, such as financial struggles. If you don’t currently have an EAP in place contact us and we can provide you with a quotation.
- Create a Safe Space to Talk – It’s important to create a team culture where your employees feel they can confide in management, and it remains confidential. By talking with your employees, showing empathy, and finding ways to support them, you will build trust between you. You may then be able to sign post them to charities that can support them such as food banks, or support with applying for certain grants to support them financially.
- Spot the Warning Signs – If you start noticing changes in your employee’s behaviour or performance that seem out of character, don’t just jump straight to managing it with formal action. Talk with your employee, find out the cause of their change in behaviour, this could be due to stress at home that is impacting their ability to perform. Create that safe space we mentioned and signpost where necessary.
If you need any further advice on supporting employees who are financially struggling, please call us on 01527 909 436 or email [email protected]