Stop hiding behind the crisis myth: it’s time for employers to step up

By Natalie Jutla, Head of Financial Wellbeing and Workplace Strategy, Perkbox

The cost of living isn’t a crisis anymore – it’s an everyday reality. It’s evident in the price of bread that suddenly increased by 50p almost overnight. It’s evident in the multi pack of diet Coke that was £3.50 a short time ago but is now £5. Or in the price of fuel that fluctuates wildly from one week to the next. It’s evident in the huge numbers of people who are struggling to afford the basics. It’s evident in the numbers of people relying on food banks or sleeping rough.

As a phrase, the ‘cost-of-living crisis’ has been bandied around the workplace for years and treated by employers as a temporary issue which will soon magically resolve itself.

But here’s the uncomfortable truth: the increased cost of living has become a permanent way of life and a standard part of the operating environment for people, and their employers. It isn’t a short-term issue, it won’t simply disappear or tail off. It’s here to stay.

Yet too many employers still sit on their hands, thinking everything will return to how it was in 2019. Spoiler: it won’t.

In many ways, things have never been as economically bad as they are now for so many people. Today’s price increases are aggressive and persistent, while shrinkflation, where manufacturers reduce the size of products but charge the same price, has become increasingly common.

The cost-of-living ‘crisis’ is talked about as if it’s a short-term, temporary issue, meaning employers can hide behind the complexity of the problem, and that it might go away. With so many priorities, it’s a way to avoid time, energy and investment required to build long-term employee financial resilience. They are essentially waiting for a ‘return to normal’ that isn’t going to happen.

The ‘just about coping’
Employers are already seeing financial stress show up in performance, turnover and absence rates. They are seeing it in meetings, with distracted employees. With resignation letters coming in faster. With people doing quick mental maths in their heads about which bill can wait. With employees taking time off because they cannot afford the commute or childcare.

Absenteeism due to financial distress cost £3.7 billion in 2023, up from £2.5 billion in 2021, according to Aegon research. That’s not a one-off spike, that’s the new normal.

But let’s not get bogged down in statistics. Because behind these figures is the human cost: the employees who are actively struggling and another group: those who are ‘just about coping’.

Arguably, it’s this second group which poses the biggest risk to employers. They are the ones not making a noise or showing obvious signs of being in crisis. They are the ones more likely to experience burnout and stress. The ones making permanent, damaging choices such as cutting pension contributions or cancelling private medical insurance, leaving them vulnerable to life shocks.

So for employers, here’s another uncomfortable truth: you are already paying for financial stress. It’s paid in absenteeism, lost hours, recruitment fees, lower productivity and low employee morale.

Overcoming reluctance
This is why employers need to act now. There needs to be a strategic mindset shift:  A new infrastructure needs to embed financial resilience into the core of the business, starting with asking employees what they need..

Many organisations, particularly those in risk-averse sectors, prefer to wait and see who else ‘jumps’ before taking action. Organisations are often reluctant to be the first to implement financial wellbeing, preferring others to test the landing before they decide to follow suit, if they do at all. But there is no reason why an employer should wait to act.

Meeting employees where they are
Embedding employee financial resilience into the mechanics of a business requires five distinct stages: Financial Literacy (learning the basics), Financial Stability (day-to-day coping), Financial Resilience (handling shocks), Financial Confidence (feeling in control) and Financial Progress (long-term security).

It’s about meeting employees where they are within these stages, understanding their needs, and then providing the appropriate tools and services in response. This doesn’t require huge investments. It requires a willingness to listen and a willingness to respond.

We need to talk about money like we talk about the weather. Financial wellbeing should be a mandatory part of every employee’s onboarding, so they know what they have and where to find out more.

Employee financial resilience isn’t a nice-to-have, nor is it altruistic. The cost of living isn’t a crisis to wait out. It’s the reality people are having every single day. Employers need to start building a business strategy that fits the world we operate in today.

Disclaimer: The views expressed in this opinion piece are those of the author and do not necessarily reflect the views of The Well Crowd. This content is for information and discussion purposes only and should not be taken as medical, health, or professional advice.