How to support your employees with rising cost of living pressures

21 September 2022 Sharyn Waterworth

Rising Cost Of Living Pressures: How To Support Employees

​Australia’s rising inflation rate can be best described by the words of Treasurer, Jim Chalmers, as a “once-in-a-generation” challenge. And it’s a challenge that has made everyday necessities like fuel, groceries and other consumer goods, skyrocket in price.
As a result, our workforce is feeling the financial pinch, and stress, that comes with the rising cost of living. So, what can employers do to support their staff during these trying times?


What the 2022 inflation rate means for employees


With sluggish wage growth not keeping up with rising inflation, salary increases have become a strained topic between employers and employees.

According to Hay’s 2022 salary guide, almost 90% of employers are set on increasing salaries by 3%. But with 84% of workers saying their performance, and the demand for their skills, warrant a pay rise of more than 3%, you might be finding yourself at odds with some unsatisfied employees.

Even more so if financial pressures are also building for your company, and the ability to raise wages isn’t on the table (or at least, not this year). And so enters the problem: companies are feeling the pressure, and so are their employees.

The cost of losing employees to competitors who are offering higher salaries (especially in areas of labour shortages) or better incentives, is a price companies will need to weigh up.

Whether or not you are planning on (or have) increased your employees’ salaries to contend with the rising cost of living, there are other measures employers can take to ensure the happiness of their staff.

You might think financial stress stays at home, but your employees bring it with them to work every day. In fact, a study from Reward Gateway found that 72% of HR Leaders say stress from the rising cost of living pressures is negatively impacting employee work.

So, what can employers do to offer more assistance and eliminate some of that financial pressure?


Alternate ways you can support your employees

  1. Be flexible with working arrangements

With the national average cost of fuel rising to more than $100 per week, a simple way for employers to support their employees is by offering work-from-home arrangements. If your employees have a considerable commute, this will cut down their transport, parking and car maintenance costs significantly.

  1. Get creative with transport schemes

If working from home isn’t an option and your staff need to be onsite, we would recommend brainstorming a transport scheme.

Whether this is a fuel card that covers their petrol or adding a stipend to take care of parking costs. If your employees take public transport, you could pay for their travel costs as an incentive as well.

  1. Give your employees more leave

Annual leave is always an appealing incentive, particularly for working parents. As an alternative way to keep employees happy, companies like ANZ have introduced extra paid holidays for long-term staff.

It’s been dubbed “loyalty leave” and is awarded to employees who have been at the company for more than three years. This takes their annual leave from four weeks to five. The aim is to increase retention, attract new talent and up employee engagement.

Similarly, energy company, Origin, has increased their paid parental leave to 20 weeks and for secondary parents, four weeks. This takes financial pressure off families and lessens stress about returning to work sooner.

Having flexible policies in place is imperative to stay competitive in the current job market. And with flexibility being one of the key drivers of staff retention and engagement, it’s worth considering a similar incentive to offer your employees.

  1. Make a retention bonus scheme

A retention bonus is a one-off payment awarded to an employee who has been with a company for a certain period of time. This type of bonus is usually allocated to key employees to incentivise them to remain with the company.

However, including a retention bonus in all of your contracts with employees also work to

  1. Boost employee loyalty

  2. Ensure a reliable staff

  3. Make your employees feel valued

A one-off bonus is more cost-effective than increasing everyone’s salaries, which you will continue to pay each year, but still provides enough financial incentive to keep employees happy (and staying around longer).

  1. Provide financial well-being assistance

Money worries are one of the main causes of stress in Australians. This stress can have knock-on effects, impacting sleep, mood and every other aspect of a person’s health. In the workplace, this can present as being more distracted and less productive, as well as having a shorter temper and not being as willing to take on responsibilities.

The bottom line? Stress is bad for your employees and it’s bad for business. In fact, financial stress costs the Australian economy $47 billion dollars in lost productivity every year.

Couple this with low financial literacy and only 4% of employees feeling highly financially confident, and it makes sense for employers to offer financial education as an employee benefit. Supporting your employee’s financial health will improve their well-being and performance.

  1. Promote employee health and well-being

The impact rising costs and added stress are having on your employees means they need your support, now more than ever. The best way you can be there for your team, whether you’re able to offer salary increases across the board or not, should be to get serious about championing their health and well-being.

Companies like Microsoft and Google are leaders in this field. Both actively promote health, wellness and balance with onsite healthcare services, free or discounted gym memberships and classes where you can pick up personal and professional new skills (like cooking).

Offerings like this (or at least to the degree offered) aren’t viable for every company, but I hope they can provide you with inspiration. There’s obviously a reason why two of the biggest tech companies in the world are investing so heavily in giving back to their employees and enriching their lives.


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