Blog: Maintaining your EVP through difficult times: Cost-of-living crisis
The current cost-of-living crisis is having detrimental effects on individuals both in the UK and across the globe. It’s an external impact that can really affect your employee value proposition (EVP). Are you doing enough to support your employees? Has the cost of living changed people’s expectations of their employer?
What is an EVP?
An effective employee value proposition enables organisations to stay attractive and competitive within their market so they can attract and retain the right talent.
CIPD defined an EVP as "what an organisation stands for, requires and offers, an employee". A strong EVP is more than just a good salary, it’s a reason for individuals to choose to work with you within a competitive job market.
Steve Dilley, Managing Consultant at Consultancy+, adds: "An EVP needs to be unique; it needs to be true, and it needs to resonate with people."
Having a well-defined EVP is highly important. If you have a weak proposition, you leave your organisation open to repercussions including a high staff turnover, difficulty attracting talent creating increased recruitment costs, and having to offer employees over inflated salaries to incentivise them to stay at your organisation.
The current climate and the cost-of-living crisis
There has been a fall in the level of real disposable incomes within the UK since late 2021, this has caused significant financial worries for most. The Covid-19 pandemic has been the catalyst for the cost-of-living crisis. Global supply chain disruptions, which were caused by the pandemic, have resulted in higher cost of goods. Additionally, the Russian invasion of Ukraine and political instability in the UK have also had an impact.
How might this impact your employees and your EVP
The cost of-living crisis may be impacting your employees in different ways. However, its likely most will be experiencing some level of stress or concern. Employees may not be able to live the same standard of life or some may be struggling to pay their bills, while others may be worried about what the future might bring. Not supporting your employees through this immensely stressful situation can have a significant effect on your EVP, as employees may search for another role where they feel they will get the assistance they need. If you aren't supporting your employees, it could also harm your employer brand in the long run. For example, leaving negative reviews on platforms such as Glassdoor. Therefore, as an organisation, supporting your employees must be a top priority.
How can you support your employees and protect your EVP
To help combat the effects of the cost-of-living crisis, several methods have been used by the UK government which include: £400 universal energy discount, an energy price guarantee for the average household, council tax rebates and extra help for the most vulnerable in society.
But there are also ways as an employer that you can help.
One of the most beneficial ways to support your employees through the current crisis is to help them financially, this could be through a one-off payment or an increase in salary, to help them with the higher living costs. If you don’t have the ability to provide financial support, the introduction of non-monetary benefits such as free gym memberships, subsidised meals or travel may help to alleviate some financial burden. Even introducing hybrid working or increasing the number of remote days your employees work can be a great way to help. This allows your employees to decide whether it's financially beneficial for them to work from home or the office – reducing the travel costs required to get to their place of work.
The most important thing to factor in when choosing how you support your employees, is ensuring the help you provide them with, is relevant and meets the needs of the majority.
By implementing new initiatives to support your employees through the cost-of-living crisis you will be enhancing your EVP, showcasing your organisation as an employer that’s doing as much as it can to look after its employees. When your workforce feels, their employer is dedicated to supporting them, they are likely to be happier and more productive.
What are other UK companies doing to help their employees in the cost-of-living crisis?
John Lewis have recently announced that they are providing their employees with a one-off payment of £500 to help them through the cost-of-living crisis. Jo Rackham, the Director of Reward and Policy at John Lewis, said: "The health and wellbeing of our Partners is extremely important to us, and we know that the cost-of-living crisis will impact everyone in different ways". As well as a one of payment, John Lewis has decided to provide each of their employees a free meal while on shift, an incentive they plan to offer until January 2023.
Virgin Media have also announced that they will be helping to support their employees by enhancing the financial wellbeing support that they offer. Philip Wohland, Chief Product Officer at Virgin, stated: "We're stepping up for our people when they need us". They have introduced a cost-of-living bonus of £1,400, for employees who earn less than £35,000, employees will then receive an additional payment of £100 each month until July 2023.
Additionally, Monzo is giving their employees who earn less than £40,000, a one-off payment of £1,000.
Some companies are choosing to scale up their benefits packages instead of offering financial support. Several supermarkets have increased their employee discount from 10% to 15%. Asda has removed its 12-week qualifying period for their new starters, which means new employees can get discounts straight away. Additionally, Aviva has removed their car parking charges at all their offices resulting in one less payment their employees have to think about in the current crisis.
It’s important that organisations don’t turn a blind eye to the cost-of-living crisis. Although supporting your workforce may incur costs in the short term, the impact of not taking action may have far higher costs to your EVP – and therefore your ability to attract and retain the best talent now, and in the future.
If you’d like further advice on how you can develop an EVP that truly resonates, contact one of our experts today.