Last week, prime minister Liz Truss announced a cost of living support package which included capping typical annual household energy bills at £2,500 for the next two years.
Truss confirmed that businesses would pay a similar rate for the next six months, adding that any additional sector-specific support would be confirmed within the quarter.
For many employers, news of government intervention will be welcome.
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Prior to the announcement, PwC found that more than four in five employers were planning to support staff with cost of living increases.
The management consultancy’s survey of UK reward specialists found planned support would primarily come through increased pay, additional pay reviews, and one-off bonuses. A minority of employers (15%) also confirmed they would explore non-monetary assistance, such as home insulation schemes, financial wellbeing programmes and employee hardship funds.
Mike Barrow, financial coach at Claro Wellbeing, told HR magazine the government’s support should not stop employers offering additional assistance in the form of education and flexible working arrangements.
He said: “While we’ve seen some employers offer one-off cash payments they should also be considering long-term support options which go beyond money alone.
“With huge numbers of employees still working from home, it may be that we see people returning to the office to reduce the costs associated with heating and lighting their homes.
“If working in an office isn’t an option, organisations should consider how they can support staff working remotely by helping with bills where possible. Organisations could also help by introducing a financial wellbeing programme.”
Aimee Ashworth, HR manager at Access2Funding, said that while any business support announcement will be too late for many SME employers, more is needed to help both staff and business cashflow issues.
However, she told HR magazine there is low-cost support that HR can roll out without this: “Our planned initiatives include a Teams group for sharing ‘winter ideas’ where staff can share their cost-saving tips.”
Lynne Webster, HR director at AdviserPlus, said with government support for businesses uncertain, and with their own rising costs, employee support will likely need to be creative.
Speaking to HR magazine, she said: “Equipping line managers to have transparent conversations will help them to provide the right level of support to deal with employee issues before they become overwhelming.
“Additionally, ask your employees how best you can support them during the cost-of-living crisis. Having honest conversations about what could be made available to them will be valuable and help to ease anxiety.”
To save jobs and help overwhelmed sectors Kate Nicholls, chief executive of trade body UKHospitality, said Truss needs to outline additional support for employers.
She told HR magazine: “We’re encouraged by the prime minister’s energy price freeze announcement but this won’t be enough on its own to save those businesses or those jobs in the sector.
“We’d like to see, very soon, the following action from the government, with a review next April: a 10% headline VAT rate for hospitality; a business rates holiday for all hospitality premises, with no caps applied; deferral of all environmental levies; reinstatement of a generous HMRC Time to Pay scheme; and reintroduction of a trade credit insurance scheme for energy.”