As inflation outstrips wages, employee discounts are proving to be an effective way to help mitigate rising costs and make pay go further.

With soaring energy bills and inflation set to tip 11%*, it is clear that inflation-busting pay rises are not a sustainable option for businesses. The challenge for employers is to find cost-effective, non-pay options to help mitigate the impact of inflation on wages.

Before the first hike in energy bills hit, Edenred commissioned independent research to understand how employees lives were impacted by rising living costs. The results paint a bleak picture that will only get worse as inflation rises and with the uncertainty around the energy price guarantee from April 2023.

The research found:

• One in four employees are having to borrow money to cover general living costs like groceries or transport
• 56% of employees have made lifestyle changes such as avoiding eating out or buying clothes
• 34% of employees are distracted by money worries which have impacted their work
• 40% have stopped saving
• 42% will spend less on Christmas and 18% will have to borrow money to afford Christmas presents
• Over a quarter expect their employer to provide financial wellbeing including savings-based benefits

(Borrow Nation: the impact of the cost-of-living crisis on employees, Edenred, August 2022).

1/4 employees are having to borrow money to cover general living costs like groceries or transport

“The impact of the cost of living is not just impacting people’s wellbeing and productivity – we’re talking about their basic ability to make ends meet,” adds Jane Sandall, Senior Product Manager for Edenred UK.

This is only likely to get worse as household budgets come under further pressure in the winter months. Organisations may not be able to keep up with inflation, but they can take practical actions to help wages go further. Employee discount schemes along with prepaid cards redeemable at supermarkets and food outlets can definitely help.

Sustainable, rapid solutions

“We’re seeing a rise in adoption of employee discounts schemes because they are a low-cost way for employers to increase an employee’s overall financial position,” says Jane Sandall.

“For a nominal set up fee, employers can quickly set up a scheme that enables them to help their people save money on everyday essential items including groceries, clothes and insurance.

Employees can also benefit by using a discounts scheme to save on occasional purchases like tech, birthday gifts and holidays.

Bottom line, the big advantage of an employee discount scheme is that whether we’re talking about savings on food or making Christmas more affordable, it will help you make sure your people’s pay goes further all-year round.”

“For a nominal set up fee, employers can quickly set up a scheme that enables them to help their people save money on everyday essential items including groceries, clothes and insurance.”

At a glance: The benefits of an employee discounts scheme

Small cost for a big impact

With a nominal fee per employee, the average employee can save up to £1,000 per year across a huge range of retail categories.

Easy-to-implement

A one-time set-up means that schemes run themselves and are virtually admin free, with a free communications and engagement programme included.

Savings-all-year round

Employees benefit from savings on everyday essentials as well as those that make Christmas, birthdays and holidays more affordable.

Easy for employees to access

As an App-based solution, it makes it easy and convenient for employees save money on the go.

Tips for making your employee discounts scheme a success

 “Our advice to employers is that when they do set up scheme, they need to communicate it well to ensure that employees use them regularly and get the maximum benefit,” says Imogen Thomas, Senior Communications Account Manager, Edenred UK.

Pick a launch date which has impact

Avoid holiday periods like August or Easter to maximise employee take-up.

Plan a pre-launch email campaign

Start to raise employee awareness of how the scheme will help them save money with teaser emails in the run-up to go-live.

Don’t leave it to your employees to opt-in to the scheme

Participation is always higher when employees get to see first-hand the discounts they can receive, so include everyone in the launch with an option to opt out.

Use a range of channels to launch and promote the scheme

Train managers to become champions and cascade information through team meetings – whether that’s face-to-face or virtually and make full use of internal social platforms and smartphones. If you have a cost-of-living hub, add a link to your employee discounts scheme.

Make it a habit

Provide frequent reminders to use the scheme every time they visit a supermarket or food outlet.

Promote the scheme ahead of peak spending times

Black Friday, Christmas, January sales and the beginning of the summer holiday season are all times when increased promotions can save your employees big money. Be sure to tell your people what they can save.

Make new starters aware of the scheme

Ensure it is mentioned as part of your onboarding process.

Financially tougher times lie ahead for employees. In the New Year, employers won’t be able to offer inflation-busting pay-rises but can take action today to help mitigate rising living costs.

Jane Sandall, Senior Product Manager, Edenred UK