With inflation hitting its highest level for years and prices for food, fuel and energy prices soaring, the ‘cost-of-living crisis’ is having an impact on employees across Ireland.
For some employers, the cost-of-living crisis has already started to affect their employees, which has in turn led to a decrease in productivity. For many, the notion of offering pay rises and the like is too expensive. So, what can employers do?
Here are some options for employers to consider that may provide much needed support and understanding to their staff:
- Contractual pay rise – this is undoubtedly the most popular request from employee’s and the first indication that the employee is experiencing hardship, however be mindful of future planning for your business with this option as it would be classed as a new Term & Condition of employment.
- One off payment or bonus – the Government extended the Small Benefit Exemption in the Budget, doubling to €1,000 the amount that employers can give workers by way of tax free vouchers a year. The gift exemption is a popular way for businesses to incentivise and reward staff. Two ISME members that provide products to support this include One4all, who are also an ISME Affinity partner offering no admin fee, free delivery and more, details here and Allgo on www.allgo.ie/.
- Offer a company loan or advance – a preferential loan is a loan made by you to your employee, or their spouse. It arises where the rate of interest applied to the loan in a year is lower than the specified rate. The specified rate set by the Department of Finance is currently:
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- Qualifying home loans 4%
- All other loans 5%
- Access to staff discounts – you may give your employee a discount on goods or services that you produce or sell in your business. This is not a taxable benefit in kind whereby the amount paid by your employee is greater than or equal to the costs you incur to provide them with the item; and the goods cannot easily be changed into money (your employee is not able to sell the item easily).
- Offer extra hours (hourly paid or seasonal) – it is important to be mindful that the maximum number of hours that an adult employees can work in an average working week is 48 hours. This does not mean that a working week can never exceed 48 hours, it is the average that is important.
- Consent to taking up a second job – ensure that the Organisation of Working Time Act along with your Health & Safety obligations, are taken into account. It would be advisable that you ask the employee to complete a Secondary Job Declaration in order to ensure there is clarity from a Health and Safety perspective.
- Hardship funds – an employee hardship fund is a tool to ensure that employees and their families can weather an unexpected crisis. When done correctly, this model is a critical tool to help combat financial instability.
- Saver Clubs – an excellent tool that will assist employee’s with their financialpllanning annually. They can be easily set up via your Payroll Department/Provider.
- Salary sacrifice schemes – these are tax efficient methods of assisting employees such as Cycle-to-work, Taxsaver Commuter Scheme, Health/Dental Care.
- Financial Wellbeing Clinics and Education – access to financial experts whether it be in person or online can really help employee’s during this unprecedented time. Whether it is advice on budgeting, saving, debt management or pension planning that they may require informed advise can guide the employee in the right direction.
- Flexible or Hybrid working – to reduce travel costs and make childcare more efficient. The incoming Right to Request Remote Working Bill will provide for the first time a legal framework for employer’s to navigate this likely permanent change to the working landscape. We expect this legislation to be enacted before the end of 2022.
- Money Advice and Budgeting Service (MABS)– this is an excellent service to the community and is free of charge, visit https://mabs.ie/.
- Access to an Employee Assistance Programme – can help your staff manage their mental health, particularly as financial issues can take their toll. One way you can do this is to look at ISME’s Wellness Programme in partnership with laya Healthcare and Spectrum.Life, offering 24/7 Mental Wellbeing Support Programme for employees and their families. Find out more here.
Employers should consider how to communicate and listen to staff, as this crisis is undoubtedly affecting the majority of employees in all industries to some degree. This is could be via one-to-one sessions, anonymous surveys or perhaps Town Hall type meetings. Improved communication can help the employer understand the hardships being faced, the options available and the types of support that may be useful to increase productivity and avoid the costs incurred with ‘absenteeism’. It is an opportunity to discuss other options rather than a flat “sorry no” to yet another pay rise request.
It will undoubtedly be a balancing act for businesses to try to navigate their way through Winter 2022/2023. Taking steps to look after the financial wellbeing of your employees can help to strengthen their financial resilience to deal with the cost-of-living crisis, and help to safeguard them for a long time to come.
For more information on this topic including information on an Employee Assistance Programme or any other HR Support please don’t hesitate to contact [email protected]
