A growing number of workers are currently impacted by the cost-of-living crisis. Figures released by the Australian Bureau of Statistics show that living costs are the highest they have been on record, and higher than the current rate of inflation1. Food, housing and mortgage interest charges were the biggest contributors to the cost-of-living increases, with employee households recording a 78.9 per cent increase in mortgage interest charges in the preceding 12 month period, due to increases to home loan interest rates.
Based on the most recent official data, households in Australia and New Zealand (NZ) faced rising costs2, as illustrated by the following:
- In NZ, the cost of living for the average household increased by 7.7% in the 12 months to March 2023, primarily driven by escalating food prices3.
- A recent report from housing advocacy groups in Australia4 reveals that 4 out of 5 renters allocate more than 30% of their income to housing expenses.
- Among renters and mortgagees, 75% of expressed concerns about their financial security due to the ongoing housing crisis.
- In NZ 57% of employees report that the rising cost of living has had a negative impact on their mental health5.
- In Australia, nearly half of Australian workers are feeling overwhelmed by debt6.
Given the relationship between financial wellbeing and mental health, many employers are wondering how they can best support their workforce through these challenging times.
Low Employee Wellbeing and Engagement Costs Employers
Prolonged elevated stress levels that relate to financial duress can negatively impact on mental wellbeing. In the workplace, this can contribute to upward trends in workplace absenteeism and presenteeism.
Employers may see staff engagement in the workplace decline, with associated decreases in productivity, which can in turn compound existing challenges faced by employers in terms of resourcing and staff retention.
A recent CEDA report concludes that returns on investment are high for employers that invest in mental health, with such employers seeing increased productivity, reduced presenteeism and more engaged staff7.
How Can Employers Support Their People?
The provision of mental health support, coupled with provision of access to education and coaching on financial wellbeing can serve as a solid foundation to afford tangible assistance for those employees most in need. Here are 4 key strategies to consider:
- Embed Health, Safety and Wellbeing as values to be lived rather than priorities to be managed. This can enable organisations to deal with adaptive challenges by supporting people individually and collectively through the development of a culture of care.
- Support leaders to build positive relationships with their teams. Help them to cultivate trust and develop positive supervisory relationships that equip them to be able to have sensitive and meaningful wellbeing conversations with their people.
- Have a clear health, safety and wellbeing strategy which details the choices being made to provide tangible assistance to employees across the broad range of challenges they may face.
- Signpost services and supports that are accessible to employees. Employee health, safety and wellbeing are line management responsibilities. In the wellbeing space, this translates to ensuring that leaders adequately signpost internal and external supports available to ensure employees are aware of the tools, education and resources that are available to them.
To mitigate the negative effects of the cost-of-living crisis on employees’ financial and mental wellbeing, our integrated health, safety and wellbeing team can work with employers to understand the potential impact on business and navigate the complex task of supporting employee psychological wellbeing.
 Employee Engagement & Wellbeing | EAP Solutions (lifeworks.com)