By Corinne Curtis, Head of HR for the Third Sector, WorkNest.
According to a new report by the Living Wage Foundation, one in seven third-sector workers are paid below the real Living Wage.
As the cost of living crisis continues to squeeze household incomes, lower-paid charity workers, who have less disposable income, may struggle to keep their heads above water. Volunteers may also find it harder to resource the support they provide.
As a result, a significant number of organisations are looking to review their reward and benefits packages, as well as searching for other ways to support their staff through this period of financial hardship while also being mindful of the financial constraints they too are facing.
So, what can you do?
Fair pay
Now more than ever, it’s important to ensure particular sectors of your workforce are not directly or indirectly disadvantaged in comparison to others who do work of the same or similar value. For this reason, some employers are conducting job evaluations to assess roles against each other and ensure they are paying people fairly.
In addition – and perhaps more significantly at the moment – some are looking at pay benchmarking to compare their salaries against the external job market. This not only supports recruitment but will aid retention and reduce staff looking elsewhere.
On the topic of fair pay, you may have certain roles where staff work hours above their contract for little additional reward. For these roles, you may wish to consider the possibility of paying overtime rather than agreeing to time off in lieu or not recognising the time at all.
Consider also looking at your pay strategy and policy: do your contracts, or pay policy, expect you to review salaries regularly? If so, what does that look like, and how is it approached? Some organisations will reflect their salary expectations against the market. In contrast, others may suggest increases in line with inflation (however, we would expect that to be caveated with confirmation that a review doesn’t guarantee an increase and that there will be other considerations such as budget and organisational performance taken into account).
One-off payments
Outside of the regular review processes, we’re seeing more charities considering interventions such as a non-consolidated one-off payment rather than a permanent pay rise to help staff with their increased cost of living.
However, it’s important to recognise that just as staff are facing pressures, so too are organisations, and additional payments may simply not be possible for every employer. Indeed, union leaders have spoken out about offering one-off bonuses as a knee-jerk reaction, arguing that a more sustainable solution is needed.
Moreover, from a legal perspective, there’s a risk of setting a precedent. To prevent this, there should be no expectation given to employees to receive any such payment or even an expectation of how it should be calculated if it is to be paid. It’s safest to seek advice if you’re likely to make such payments more regularly, even if only annually, to ensure no obligation to pay is created.
Flexibility
There are growing examples of individuals asking their employers to review working arrangements to support them financially.
Staff may, for example, request to work from home to reduce travel costs. Equally, others may want to work from the office due to heating and electricity costs in their home environment if they are hybrid workers.
The more flexible you can be, the better – particularly as these initiatives will typically cost organisations far less than additional payments and other financial perks.
When considering flexible working arrangements, reflect on whether the same adjustments can be made for volunteers to help manage their costs.
Cash flow
Are there practical ways you could alleviate cash flow concerns? For example, if a worker or volunteer incurs expenses, could you look to reduce the timeframe for reimbursing them so that they are not waiting for cash to be refunded? Alternatively, could you cover these expenses directly?
Every little helps. To this end, organisations might consider things like providing the occasional team breakfast or lunch or providing free hygiene products in the bathrooms. While this won’t solve the problem in its entirety, it will help people to save a few pounds.
Signpost
As much as you might want to, employers cannot solve people’s financial concerns by themselves. It’s therefore important to think about how you can signpost appropriate support.
Many organisations have access to counselling or an employee assistance programme which may include some form of financial counselling. While talking about money can be taboo, a gentle reminder to everybody about the scheme and what it covers may just be the trigger that somebody needs to realise that they can speak to someone about their financial circumstances or worries.
The important thing is to find solutions that are viable for your charity. While pay rises may be off the table, employers must not overlook the strong correlation between financial security, wellbeing and productivity. In fact, the Money and Pensions Service estimates that almost eight in 10 UK employees take their money worries to work, affecting their performance, and 4.2 million worker days each year are lost in absences caused by a lack of financial wellbeing. In this way, doing nothing may cost your charity more.
For more tips and advice, visit WorkNest’s Cost of Living Hub.
