Taking a gendered approach to the cost-of-living crisis

More women than men will be affected by the cost-of-living crisis, because low pay is a gendered issue. What support should employers be providing and how can data analytics be used effectively?

There are more women working part time than men and 60% of below ‘living wage’ jobs are held by women. The Office for National Statistics reported a 15.4% gender pay gap in 2021.

Low pay means that food and energy costs are a higher proportion of outgoings. Low paid workers have to pay the same for food, energy, accommodation, car insurance, etc, but on lower average wages. Increased energy costs and other price rises now mean that, for many people, basic living costs are exceeding earnings.

From a gender perspective this will particularly impact lower paid women who live independently. However, this blog offers practical support to all low paid workers.

Women also suffer from a gender savings gap, regarding both short and long-term savings, meaning that more women than men may not have sufficient financial buffers to see them through this crisis.

This blog considers practical steps employers can take to support women (and to a large extent, men) during the cost-of-living crisis and examines what can be done, longer term, to close the gender pay gap. You can also watch our video overview on how organisations can support employees during the cost-of-living crisis, and why firms need to think longer term.

Immediate: employee support

Data analysis

For the immediate solutions, you could start by analysing employee financial wellbeing data. This will confirm the issues being faced by employees, the scale of them and impact on the organisation. Filtering by gender will identify if women have different needs.

Zero budget options

There is a lot of support that can be provided to employees with little or no financial cost to the employer, all of which could be wrapped up in a financial wellbeing strategy.

Signposting employees to free services is a great start. There are plenty of resources to help with energy costs, including government¹ and Ofgem² websites, as well as some that can provide debt advice, such as MoneyHelper.³

To be a leader, put in place a domestic abuse policy. Domestic and financial abuse disproportionally affects women, and the current economic pressures are only likely to add to this, so make sure you have safeguarding measures in place and highlight help such as Women’s Aid.⁴

This may be a good opportunity to look inwards at other areas too.

• Internal policies. Could these be improved, especially those that incur a financial burden? And consider what can be introduced or eased (e.g., car sharing, expense reimbursement, cost of workplace social events).
• Employee benefits. Review and recommunicate your benefits. Employees could be missing out on services that could reduce their financial burden. For example, in one organisation a financial wellbeing survey revealed that only 5% of employees used the discount scheme regularly, despite almost 20% finding it a challenge to meet their monthly financial commitments. Employers can also utilise additional services such as pension providers’ financial wellbeing hubs. Analyse any gender bias in benefit take-up as well. If women can’t afford healthcare policies, for example, this could impact the employer in terms of return-to-work timescales.

The review could also deliver cost savings to the employer, which could be reinvested in cost-of-living support.

Budgeted options

If you have budget available, one-off “cost-of-living” payments can provide immediate relief but should be offered carefully as these can disrupt social benefit payments and trigger higher tax for certain employees. A more gradual, although potentially more costly long-term option, is committing to a “real living wage”, as defined by the Living Wage Foundation.⁵

Providing bespoke financial education, more tailored to your employees’ needs, will better evidence how to maximise value from your own benefit package, Employee Assistance Programme (EAP) and other resources.

There are also smaller, less obvious options to explore. For example, have you considered following Scotland’s lead in providing free period products for your female employees in the workplace?

Longer term: closing the gender pay gap

The cost-of-living crisis and the gender pay gap are deeply connected. The pay gap is an indicator of more women working in lower paid roles and not being able to progress in their careers. Closing this gap and enabling women’s progression and earnings is critical for employers as part of their longer term approach to the cost-of-living crisis.

Data analysis

Could you make better use of your pay gap data? Regulatory pay gap reporting only gives you data at organisational level. Segmenting data by factors such as age and job grade will help you pinpoint which groups are experiencing higher pay gaps and allow you to direct resources and action planning more effectively. Overlaying quantitative data with qualitative data from an employee listening project will hone this further.

Visit our Employer DNA hub to see how we turn data into intelligence, helping organisations make smarter decisions to deliver real transformation.

Benchmarking data against competitors and industry will provide insight for talent management; women who were sacrificing pay for flexibilities or proximity to home may now be forced to look to employers offering better pay, training and career development. Losing women will turn the clock backwards on closing the gender pay gap and impact cognitive diversity – a key element of business success.

Read more about our gender pay gap analytics tools and services.

Reducing the gap

Backing The Fawcett Society campaign on ending salary history is a good place to start with recruitment. Review internal pay structures and the pathway for promotion — widen job descriptions, enable flexibility and scrutinise the impact of visibility on promotion rates in the current era of hybrid working. Commit to policies that enable women in their career, such as childcare, menopause policies and career coaching and mentoring. Plus, see how you can bridge the gender pension gap.

Whilst good intentions are there, at this point we need to ask ourselves whether more can be done to close the pay gap and more quickly. Barnett Waddingham has already helped organisations analyse their gender pay gaps. If you would like to see how we can help you do the same, you can find out more about how we unlock and analyse reliable pay gap analytics.

¹ www.gov.uk/energy-company-obligation

² www.ofgem.gov.uk/information-consumers/energy-advice-households/getting-help-if-you-cant-afford-your-energy-bills

³ www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt/use-our-debt-advice-locator?

⁴ www.womensaid.org.uk/information-support/

⁵ www.livingwage.org.uk/

^* www.closebrothersam.com/for-employers/news-and-insights/gender-savings-gap-leaves-half-of-female-workers-feeling-financially-unprepared-for-retirement/