How can a social housing employer help its employees with the cost-of-living crisis?

Posted: 01/03/2023

Soaring inflation and a likely recession have caused employees to feel extreme financial pressure. Some are striking over pay and conditions in a range of industries. In these challenging times, social housing organisations can take various measures to help not just their tenants, but also their staff.

Pay a higher salary

This is, unfortunately, unlikely to be affordable for most organisations. While individuals have been hit by high energy prices and overall costs, so have businesses. If it is not possible to offer pay rises at or above the rates of inflation. or by paying the non-mandatory ‘real living wage’ (over and above the national minimum wage), then the organisation may want to re-examine its gender pay gap. If something can be done to bridge the gap, even just in a specific team with the greatest disparity, then action should be considered.

Discuss financial management

Where wage increases are not possible, employers could consider providing their employees with access to financial or pension advisers for drop-in sessions. Some employees may benefit from tips on allowances for which they can apply. Equally, it is important that employees understand their pension arrangements and what they will receive when they retire. Employers can consider whether to pay greater pension contributions, while employees should ensure that they are not actually paying more than they need to. Note that the provision of pensions advice can, in certain circumstances, be a taxable benefit for the employee.

Salary sacrifice

As well as considering making pension arrangements more efficient, employers can look at wider salary sacrifice options. By setting up pension or benefits salary sacrifice schemes, such as childcare vouchers or cycle to work schemes, both employers and employees can benefit from tax and National Insurance contributions savings. However, care must be taken to ensure that the procedural requirements of the schemes comply with the tax rules.  

Benefits to reduce the cost of outgoings

As well as schemes such as childcare vouchers, employers can look at whether an on-site creche or paid time off for emergency childcare leave would improve parents’ disposable income.

Provision of lunch, teas, coffees and/or a cafe to staff with discounted prices can make mealtimes less expensive and encourage attendance at work. Also, negotiating employer loyalty discounts with retailers/local warehouses can mean that an employer can get discounts on groceries for staff so that food is less expensive at home too.

Season ticket loans may make a commuter’s costs more bearable by allowing them to spread the cost of the ticket over the year. However, for those whose concerns come from regular commuting costs, allowing remote working more often can make it easier for employees to manage work and bills. Conversely, for those whose bigger expenses are the energy bills from working at home, ensuring provision of suitable office space can help create savings in respect of employees’ utility bills.

Food banks and energy vouchers might be explored as well. All of these ideas can cause tax charges to arise depending on the circumstances so careful structuring is advised.

Schemes to reduce sickness absence

Some employees’ problems will be eased by discussing them on a wellbeing programme concerning mental health, or by using a free and confidential employee assistance programme. If sickness absence is a longer-term concern, then policies such as private medical insurance, critical illness or income protection schemes may be useful to explore. As before, the provision of such benefits can lead to tax charges which should be considered prior to implementing such schemes.

Pay more frequently or provide loans

Finally, one of the big risks to employees is the debt spiral precipitated by living from one payslip to the next. Employers could consider whether to make the payroll more regular, such as weekly or fortnightly, or even look into making low interest loans to their employees.

Alternatively, a new concept known as ‘income streaming’ has arisen whereby employees are able to be paid their salary before the scheduled payday. Rather than a payday loan, this enables the employee to get money early. The employer controls this, which means greater protection against an employee stretching themselves too far.

Results from this assistance

When employees are struggling financially, this can result in low productivity, poor morale, resignation, resentment, mental health issues, physical illnesses leading to absences, and burnout. This presents a wide range of problems to social housing employers. By supporting staff in these challenging times, employers can see a major boost in their business. It can increase loyalty and be a means to attract talent from other organisations.

If thinking about implementing some of the various options referenced above, employers should take specialist advice from employment and tax law advisers to ensure that they are setting the measures in the best way possible.

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