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Cost of living crisis may fundamentally change the employer-employee relationship

August 24, 2022/in Employee benefits, Employee engagement, Employee financial wellbeing, Employee Motivation, Employee wellness, Employees, Short blogs /by Love2shop

Cost of living crisis may fundamentally change the employer-employee relationship

UK inflation is now in double figures, hitting 10.1% in July, and the Bank of England is warning of 13% by the end of the year.

Millions of people are facing a tough autumn and winter. It seems now the cost of pretty much everything is rising – filling up your car, buying groceries. And the projected cost of powering and heating our homes reaches ever more eye-watering levels.

People are struggling now and are likely to find their incomes squeezed even more over the coming months. However, for some people, extra help is coming from what perhaps they might see as an unexpected source – their employer.

For generations of people their relationship with their employer was quite simple. They would come into work each day for a set number of hours and would be paid accordingly for that time. For some there might be bonuses.

The corporate mantra ‘our people are our greatest asset’ may have been trotted out every now and again but such declarations were often met with an eye-roll from overworked workers. As far as they were concerned the relationship was purely transactional.

When employers showed people they were their greatest asset

In the years leading up to the COVID-19 pandemic there were signs of a cultural shift. More enlightened employers started to talk about ‘wellbeing’. No doubt this was partly inspired by multiple studies showing mental health issues were costing UK plc billions each year in lost productivity.

Environmental Social and Governance (ESG) came to the fore. This asked what companies were doing to cut carbon emissions, address diversity and, crucially, focus on the wellbeing of their teams. Investors are now increasingly looking at what ESG framework a business has in place before they part with their money.

This new culture of enlightenment accelerated during the pandemic. Firms, large and small, simply had to demonstrate they had procedures in place to minimise the risks to their staff. If they wanted to keep operating, they had no choice but to put protections in place.

And it could be argued the cost of living crisis is one of the first big tests for ESG. Directors and HR departments are looking at their staff and they are seeing people struggling to make ends meet. A growing number of businesses are realising they can’t just say ‘well, that has nothing to do with me’.

Wage stagnation is prompting employers to respond in new ways

We are seeing a rise in industrial disputes with unions pushing for significant pay rises and some companies, at least initially, resisting. However, there is a number of employers who are stepping up to the plate. Car maker, Rolls Royce, is giving employees an extra £2,000 in cash. Banking giants, Barclays and Lloyds, are doing similar.

But this cultural shift is about much more than cold hard cash handouts, as welcome as they are. The most forward-thinking employers are taking a more holistic approach to fostering a workplace culture that makes people feel valued through the good and bad times. Creating relationships that go beyond the transactional.

Love2shop is now working with employers and their HR teams across multiple sectors. It is helping them to generate a positive culture by making people feel valued, recognised and rewarded.

“Love2shop vouchers are truly valued by our employees for the sheer variety they offer.”

One such business is Evri. A home delivery specialist, Evri has prospered thanks to the boom in e-commerce. It delivers packages to people’s homes, workplaces, as well as to ParcelShops and Lockers, seven days a week. It delivers more than 600m parcels a year on behalf of retailers including Next, ASOS and John Lewis.

Thanks to Evri’s rapid growth it now employs 6,500 people across the UK. It wanted to establish a rewards programme and approached Love2shop for help.

Working together they established the company’s ‘My Rewards’ programme using a combination of both Love2shop Digital Reward Codes and paper Love2shop Gift Vouchers.

Alongside the Love2shop Digital Reward Codes and paper Love2shop Gift Vouchers, there is a suite of products including Love2shop Contactless. Love2shop is also accepted by more than 150 leading UK consumer brands including Wilko, Iceland, Matalan and Argos, and Marks & Spencer (through exchange). People can use them to pay for everyday essentials and for little luxuries.

Evri’s My Rewards platform allowed colleagues to award one another Reward Points for their achievements at work to eventually be exchanged for prizes. It also frequently offered ad-hoc recognition, or ran on-site competitions, across their sites.

Rewards needed to be kept simple to redeem because many Evri employees speak English as a second language. This can present a challenge if a redemption process is complex or involves lots of text instructions.

Love2shop’s digital platform allows businesses to easily scale up

With such a diverse workforce, it was important that a broad variety of rewards was available through the scheme. And, because of its ongoing growth, Evri required a reward which could easily scale to service an ever-expanding workforce.

Evri’s Internal Reward Team, implementing the My Reward platform, also needed fast order turnaround to manage the demand from employees during busy staffing periods.

Reward Codes easily integrate with Evri’s My Rewards system while keeping simplicity a priority. Delivered by email, and redeemed without registration, they were the perfect fit for Evri’s platform and their staff’s needs.

Paper Love2shop Gift Vouchers make for excellent on-the-spot and ad-hoc rewards. They’re ideal for audiences with limited or differing computer skills or access to the Internet.

Sarah Woolley, a Reward Specialist at Evri, said: “Love2shop provides a quick, easy and reliable service and their Love2shop vouchers are truly valued by our employees for the sheer variety they offer. There really is something for everyone.

“The end-to-end process from ordering reward codes or vouchers and awarding these to employees is easy to navigate and quick, which works really well for us as we are such a fast-moving business. I would definitely recommend Love2shop to anyone looking for a flexible and comprehensive reward solution.”

Shift in workplace culture could ease burden of cost of living for employees

Many people across the UK will struggle to pay their bills in the coming months. It is a tough time for sure but what hopefully will emerge from this challenging time is a genuine shift in workplace culture.

Smart businesses are now recognising that the traditional relationship between employer and employee is changing. People want to be paid well but they also want to feel like they are part of an organisation that values them as people as well as the skills they bring to the job.

Companies that fully embrace this new way of doing business will create happier and more highly-motivated workforces as well as profitable and successful businesses.

You can read the Evri case study here.

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Cost of living rise presents big challenges – and there are ways to mitigate the impact

August 17, 2022/in Employee benefits, Employee engagement, Employee financial wellbeing, Employee Motivation, employee wellbeing, Employee wellness, Employees, Rewarding employees, Short blogs, Staff incentives, Staff morale, Staff retention, Thank a colleague, Workplace morale /by Love2shop

Evidence of the UK’s worsening cost of living crisis is becoming impossible to ignore – it is there in the data and in countless anecdotal examples.

One high street butcher, Raymond Millar, reports that his customers had already started saving for their Christmas dinner in July. His savings scheme that allows people to buy their meat for the festive season doesn’t usually start until September.

Then there is the GP, Dr Laurence Dorman, who for more than a year has been offering food vouchers to his patients. He is now giving them out with increasing frequency. Dr Dormam told the BBC the cost of living crisis could have “massive, profound implications” for patients’ health.

It feels like the price of everything is on the rise. As we emerged from the pandemic supply chains struggled to keep up with demand. This caused an initial spike in inflation and now the Russian invasion of Ukraine has accelerated the crisis.

Energy costs push inflation upwards

Russia is a major global source of oil and gas and the war has put huge constraints on supply. From June 2021 to June 2022 gas prices for UK households soared by 95% and electricity prices by 54%. The UK’s wholesale electric price is linked to the price of gas.

From October 1, the energy price cap will go up further. The price cap is a mechanism that sets the maximum amount that suppliers can charge in England, Scotland and Wales. From October the typical annual gas and electricity bill is likely to reach £3,358, according to consultancy Cornwall Insight.

In contrast, in October 2021 the average annual bill was just £1,400. And Cornwall Insight is forecasting this could go above £4,200 by January 2023. Millions of people are wondering whether they will be able to afford to switch the heating on at all this winter. This may dampen the enthusiasm from some for working from home.

Finance and consumer rights guru Martin Lewis, says: “This is a national crisis on the scale that we saw in the pandemic.”

Martin, and many others, are now calling on the government to take urgent action to soften the blow. From September it is likely that, whoever is prime minister, whether that’s Liz Truss or Rishi Sunak, will be forced to act. Both have been vague on the issue during their campaigns. But once they take office, the pressure to act will be irresistible.

Inflation is now above 10% and the Bank of England is projecting it will hit 13% in the next few months, tipping the UK into recession. Food prices are rising rapidly in the shops. Who can forget the price of a tub of Lurpak surging above £9 in July?

Ukraine impact felt in the supermarkets

Again, the conflict in Ukraine is having a major impact. Ukraine is a leading exporter of essential commodities such as sunflower oil, grain, maize and wheat. The United Nations has warned global food costs could rise by 20%. The rising price of oil means the cost of moving food around is also much higher, adding to high prices.

Rising costs are also hitting businesses which are in turn facing the dilemma of whether or not to pass the costs onto their customers. Some cafes, bars and restaurants are considering reducing their opening hours to reduce outgoings, according to a study by eEnergy and Censuswide.

And even nipping out for a sandwich in your lunch break is now becoming more expensive. In the last few weeks both Boots and Co-op have hiked the prices of their meal deals. Outside London, Boots has put the price up from £3.39 to £3.59. In London it has gone up from £3.99 to £4.19.

Co-op’s meal deals have jumped in price from £3.50 to £3.75. And the nation’s favourite bakery chain, Greggs, is warning of rises of up to 9% on some products in the coming months.

There is upward pressure on the cost of getting to and from work. Motorists have already seen petrol prices at the pumps rocket. And public transport users face further unpredictability. Train tickets prices rise each January based on the retail price index from the previous July, plus 1%. This means commuters could face 12% fare rises in 2023.

Although still low by historical standards, interest rates are also on the rise. At the time of writing the Bank of England has pushed up rates to 1.75% from 1.25%. Those on fixed-rate mortgages have some protection for the moment. However, the average monthly cost of a tracker mortgage has increased by more than £160 since December 2021.

Simple actions that make a difference

There are steps people can take to mitigate some of their daily outgoings. Sharing car journeys into work with colleagues could make a significant difference to fuel costs. As could using park and ride schemes. And although grocery prices are rising, taking your own lunch into work will always be cheaper than buying a sandwich.

And many coffee shops run loyalty schemes where you get a free hot drink after your card’s been stamped so many times, or a reduced price if you use a reusable cup. These smaller benefits can make a difference over time.

There are also things employers can do. There is an increasing number of businesses which are being pro-active. According to the Living Wage Foundation, 10,000 employers in the UK have now committed to paying the Real Living Wage. At £9.90 for most of the country and £11.05 in London, this is higher than the mandated National Minimum Wage.

In recent weeks there have been multiple reports of companies pledging one-off financial payments to help their people deal with the cost of living. One of those is Love2shop, which has offered a payment to all of its employees.

And the company is doing its bit for the wider community by partnering with digital payment business PayPoint. This agreement will see both parties expand their product range to provide local authorities with a new way of servicing the most financially at-risk people.

Employers can do their bit to help

Love2shop is also working with businesses across the country to help them offer real financial rewards and incentives through its Love2shop gifting products. Given the broad range of retailers available on Love2shop, it allows employers to meaningfully contribute to their employees’ cost of living dilemmas if that’s how they choose to spend their gift cards.

As well as the ‘treat’ opportunities with a Love2shop Gift Card, it’s also accepted by more than 150 leading UK consumer brands including Sainsbury’s, Argos, Tesco, Wilko, Iceland, Matalan, New Look, and Argos. So people can choose to buy everyday essentials or for those little luxuries.

With the new school year about to start, a multi-retailer gift card could offer great savings on the price of school uniforms or other essential items such as school shoes or a PE kit.

This is also the time of year when we start thinking about Christmas. People could use their gift card to get a head-start and buy gifts in advance, taking away some of the stress normally felt in November and December.

Some employers may be able to negotiate cheaper corporate discounts with local car parks to reduce parking costs, or allow more people to work from home when practical – if the costs don’t outweigh the costs of going to work considering the rising fuel costs come winter.

There are tough times ahead but employers can make a big difference to the lives of their employees for a modest outlay.

If you can see how Love2shop reward and recognition products could help your business, contact our business team today. Email [email protected] or call 0344 375 0739.