At last September’s CIPD Scotland Conference I chaired a panel discussion about the role of reward and the importance of financial wellbeing in a high inflationary environment.
We had about 50 people in attendance, inflation had just tipped over the 10% mark, and we all hoped it was not here to stay for too long.
At this year’s conference, at the end of March, I chaired another panel discussion about supporting employees through economic uncertainty.
This time, we had over 300 people in the audience, inflation stubbornly at 10.4% and similar hopes of the end being in sight.
Of course, the key difference is that we have had an additional six months of experience of dealing with the cost-of-living crisis.
Employees, employers and people professionals have had to navigate an unusual economic landscape characterised both by high inflation and a very tight labour market. The lessons we learned in those six months were a key topic of discussion throughout the entire event.
From our own research we know that the cost-of-living crisis is impacting employee wellbeing, with knock-on impacts on their performance at work too. Three in 10 workers say that money worries impact their ability to do their job well.
Our Working Lives Scotland report found that only 35% of Scots on the lowest salaries manage to keep up with all their bills.
Financial wellbeing is now a priority for employers and employees alike, so what can be done?
The CIPD has consistently emphasised three elements. First, pay a fair and liveable wage. Second, provide financial wellbeing benefits as part of the reward package. Third, make sure employees have opportunities for in-work progression.
We explored all three of these in one particular conference session, which gave the audience an excellent opportunity to see these principles translated into specific examples.
Our three panellist provided examples across a range of sectors and organisational sizes.
Lindsay Fyffe-Jardine, chief executive of Edinburgh Dog and Cat Home, outlined how the organisation put employee voice at the heart of their small charity.
Conducting focus groups helped them identify solutions to boost employee incomes through salary top-ups and parachute payments, but also softer practical measures like freezer meals or toiletries on site.
They also offered sessions with Citizens Advice advisors to ensure employees understood what support they were entitled to.
Stephen Pearson, chair of financial inclusion for Scotland and Leuchie House, echoed the importance of a creative reward package to support employees.
At Leuchie House, with 90 employees, this included offering free meals throughout the day, mobile charging stations, car sharing, cycle-to-work schemes or retail shopping discounts.
Stephen also emphasised how salary-based savings and loan schemes, at considerably lower interest rates, can make a substantial contribution to employee financial wellbeing.
Different employees will, however, have very different needs. This can be more challenging to navigate for larger organisations.
Lesley de Jager, director of people and culture at Cornerstone, outlined her approach in a organisation of around 2,000 employees.
At its heart was ensuring financial wellbeing was seen as a strand of a broader wellbeing policy, recognising money worries can lead to mental or physical health concerns.
For larger organisations in particular, the role of managers in communicating with employees and normalising conversations around financial wellbeing is crucial.
It is line managers that can spot issues, provide immediate signposting to support and feed back to the people team. Managers are also key to unlocking flexible working, which can have a key role to play in supporting employees with childcare costs amongst others.
We also spoke about pay fairness, which can become a contentious issue, especially further up the salary structure.
Subjective pay - the feeling of being paid appropriately compared to your peers - is just as important as objective pay.
Pay transparency within organisations is crucial here, but panellists agreed that we need to do more or on cross-organisational benchmarking too – something that is a more challenging prospect.
The key thread running through the discussion was the need to go above and beyond to support your employees in extraordinary times. Pay and benefits are important, but financial wellbeing is a much broader concept.
Ultimately, just like with the pandemic, employees will remember how their organisations responded when times were tough. A supportive organisational culture gets rewarded through employee loyalty and enthusiasm.
Hopefully, at next year’s conference, we will be able to look back with a sigh of relief, but also pride in our response.
Marek Zemanik is the CIPD’s senior public policy adviser in Scotland
