Too much month at the end of the money?

Jo Faragher

The news this week that almost a third of workers live ‘paycheck to paycheck’, struggling to make ends meet, might not highlight a new phenomenon.

But CareerBuilder’s survey is also just a taste of how many workers in the UK have been hit by a perfect storm of wage freezes or zero-hours contract jobs, a feeling that ‘any job is better than no job’ and companies making cuts to additional perks such as training and bonuses.

At the same time, it has been difficult for businesses to find extra money to invest in pay rises or development initiatives for staff when their income may have been squeezed, and now things are looking more optimistic it’s not necessarily going to get much easier.

Next year will see the introduction of a new national living wage, which chancellor George Osborne has claimed will provide a pay rise for six million workers. But finding that extra money to meet the £7.20-an-hour commitment, not to mention any increases after that, will be a challenge for many employers.

What we may see is some companies making cuts elsewhere to pay for the rise, so workers could end up doing fewer hours, or lose out on higher pension contributions, for example. Either way, it’s still entirely possible we’ll still see workers struggling at the end of the month when the money runs out because materially, they’re no better off.

As CareerBuilder’s survey shows, many workers have taken action to make ends meet, such as taking on a second job or stopping eating out. But when employees are either too tired to give their all to their job because they’re working too many hours, or they’re disengaged because their life outside work has been cut right back, this hits productivity hard.

Where possible, employers need to equip employees with the financial tools and knowledge to make it easier to save, or at least easier to cope from month to month. This means offering a wage they can sustain as a company, but which also offers a reasonable standard of living, and complementing that with education on saving or low-cost perks such as money-off vouchers that will help them day-to-day. Just because someone leaves the office at the end of the day, doesn’t mean we stop caring about how they manage – and the happier and more comfortable they feel about their financial situation, the more they can give to their job.