Not just about money: Supporting workers through the cost-of-living crisis

Rising stacks of coins with the word costs

The cost-of-living crisis (defined as a fall in real disposable income) hit the UK in 2021 and created, in 2022, the biggest one-year fall in living standards since records began. Forecasters such as the Office of National Statistics (ONS) predict that living standards will continue to fall into 2024.

Cost of living crisis – the issue for employers and workers

As a consequence of the cost-of-living crisis, and constraints imposed by this (such as the ability to eat healthy food, engage in exercise, socialise), many people’s health has worsened, and it is estimated that around 50% in the UK are experiencing anxiety about paying their bills. This number is likely to be exacerbated by the pressures of Christmas spending.

The crisis has also created a significant cost for employers, who are being tested by not just the financial crisis, but labour market pressures such as skills gaps, loss of older workers and lowered EU immigration following Brexit. Although supporting workers through this crisis is essential, from both a moral viewpoint and a final one (aiming to reduce turnover and absenteeism and preserve engagement and productivity), with the pressures described, many organisations are finding that keeping up salaries with inflation, and supporting employees financially through pay incentives is proving untenable. 

Research project to understand how best employers can support workers through non-pay offers

Over the past year, we have conducted a large-scale research project through our research consortium following an evidence-based approach, aimed at understanding how employers can best support workers through non-pay offers. The research combined academic and practitioner literature reviews with focus group data from 54 workers and 35 stakeholders, survey data from 737 workers across 6 organisations,  and round table data from 10 cross-sector thought leaders. The findings from all groups were combined into a series of findings and recommendations.

Five top tips on how best to support workers with non-pay offers during the cost-of-living crisis

1. Based on our research findings, we have compiled five top tips for employers:

Although our research was about non-pay offers, we spoke to workers who were having to choose between heating and eating, even in some cases when receiving a living wage. In this context, or when pay is not meeting basic needs (such as rent, food, heating and commuting costs), non-pay offers will not only be ineffective as support incentives, but potentially be harmful for organisational goals.

2. Make decisions based on what workers actually want:

This sounds obvious, but our research found that for many workers, the support offered by employers (although well-intentioned) was not necessarily what they needed or wanted. Examples included providing vouchers for premium brands or money off days out when workers were struggling with the essential costs.  Involving workers in decisions and asking for feedback – particularly from those in lower paid positions and those with less of a voice in the organisation – is recommended to understand what is really going to be most helpful. This needs to be an on-going process too as workers needs and situations are constantly changing.

3. Build and offer a whole variety of non-pay support options

Worker needs, challenges, issues and experiences are incredibly diverse, none more so that at the moment. Therefore support offerings need to reflect this diversity. Our research found the most popular non-pay provision of support was increasing financial resources (like transport initiatives, discounts and vouchers), but we also found that workers also valued the following: job design initiatives (such as flexible working and development opportunities), measures to combat stigma and manage mental health (such as training), strategic measures (such as staff needs assessments), measures to improve equity and peer support (such as wellbeing champions and community days) and peer support initiatives.   

4. Make sure that workers can find, access and use your support offers

Despite organisations’ best efforts, we found that many workers were not aware of what employers already had in place to support them. To increase awareness and uptake, we recommend using multiple channels of communication, consider the equity of all your offers (for instance are they fair and open to all), improve navigability of internal resources such as intranet, consider literacy and language in your population, and ensure that all communications are free of judgement and stigma (recognising that for many, talking finances is difficult). Line managers are vital to identifying support needs, signposting support and increasing the likelihood that support will be utilised, and so ensuring that line managers are trained and have appropriate resources is key.  

5. Create a healthy culture, with appropriate levels of demands, where workers feel valued

Join our growing network of employers
Receive Make A Difference News straight to your inbox

Across all organisations we worked with, workers talked of the need to build a genuine culture of care where they felt valued, appreciated and ‘seen’ as individuals. With regards to the working environment, we also saw that increasing levels of workload and pressure were ubiquitous, and that this both negatively impacted on worker perceptions of appreciation, and also reduced the likelihood that both workers would access support, and that managers would signpost support. Consider reviewing the extent to which your policies, processes and practices are consistent with a culture of care to continue to support your workers.

Added pressures of the Festive Season

The cost-of-living crisis continues to cause stress and anxiety for many workers and employers and this is likely to come into sharper focus with the additional pressures of the Christmas season.  Whilst supporting with additional pay may be difficult for some employers, our research demonstrates that, if worker basic financial needs are met, there are a variety of low or no-cost ways that employers can help and ensure that they retain happy, productive and engaged workers.

You can read the full cost-of-living research report here:

About the author:

Dr Rachel Lewis is a multi-award-winning Occupational Psychologist who specialises in Health and Wellbeing at work. Rachel is a Managing Partner of Affinity Health at Work, a consultancy and research group who were recently recognised as the ‘Best Business Psychology Consultancy 2023’ by the Association for Business Psychology. Rachel is also a Reader in Occupational Psychology at Birkbeck University of London and is widely published in the field of health and wellbeing at work, contributing to national guidance, and evidence-based tools and interventions. In 2023, Rachel was ranked 3rd in the HR Most Influential Thinker Awards.

You might also like:



Sign up to receive Make A Difference's fortnightly round up of features, news, reports, case studies, practical tools and more for employers who want to make a difference to work culture, mental health and wellbeing.