A rise in over employment is no surprise with inflation rising over 10%.

Many workers are feeling the pinch on their salaries with UK inflation currently standing at 10.5%, a 40 year high. Interest rates are also rising to their highest levels since 2008. Wage increases are predicted to only hit 5% as a national average at peak increase in 2023. This is, less than half the rate of inflation. For example, it is reported that one in 10 teachers have taken a second job.  Many are also having to use food banks to meet their basic needs.

The Office for Budget Responsibility (OBR) recently published data which highlights the impact of the recent economic turmoil, with stats predicting eight years of economic growth wiped out over the next two years as the UK enters a prolonged recession. With this economic downturn living standards for the population will also experience a significant downturn.  Many are struggling to pay for basic essentials. Compounding this economic picture is the government’s efforts to bring down borrowing.  With a combination of spending cuts and tax rises, which will impact upon household spending power and reduce economic activity.

Current Stats on Over employment

This combination of slowing economic growth, salary stagnation, inflation and government austerity and tax rises has put a lot of employees who were previously financially comfortable into tighter conditions. This is illustrated by some startling statistics:

• £1.5 billion of consumer borrowing in November alone, with £1.2 billion spent on credit cards.  This is the highest monthly increase since 2004.
• 91% of food banks showed a marked increase in demand, with some showing 51%+ increase in demand year on year.
• The creation of ‘warm banks’ across the UK, which are places generally run by local authorities. Individuals can go to stay warm during the winter if they can’t afford their heating bills.
• 34% of workers are looking for a second job to combat the cost-of-living crisis (November 22 figures).
• 77% of full time employed workers would work overtime to try and boost their take home pay.
• 82% of working parents also said incomes were not keeping up with expenses putting strain upon them. Almost 9 in 10 of this demographic saying they were looking for another job.

The combination of these economic and monetary factors is causing a lot of employees to take up second or even third jobs to survive financially, called ‘over employment’.

Impacts of Over Employment

Usually employers require ‘full’ commitment to their primary job from their employees. Working elsewhere would require having sought approval that no conflict of interest exists. But would relaxing company policy on second jobs be helpful? There is a lot of research highlighting the link between financial wellbeing and employee wellbeing, stress and burnout.

Employees feeling the strain on their finances can impact both the employees and the business in terms of employee performance and output. If employees are already experiencing problems with their mental, emotional or physical wellbeing related to the increased stress levels from financial pressures, this could be exacerbated by burn out from working excessive hours, not enough rest periods and the extra pressure and time consumed by a second job. There is a definite need for balance to ensure employees are safe and well. Also not overdoing it to a detrimental effect on them, their family life and productivity in their main job.

Workers taking up second jobs, and businesses supporting employees to do so, could be beneficial to both financially. At a time when business is seeing an increase in costs and reduced economic activity, they may not be able to increase salaries or provide the overtime that employees need to address their own financial squeeze. This puts less strain on the employee-employer relationship and allows the employee to earn the extra income they need. However, this may not necessarily be true if employees feel their employer is not doing enough to support them during this crisis and they feel undervalued, underpaid and exhausted from having to have more than one job.

What Can Employers and Employees Do To Tackle Over Employment

Wellbeing strategies

Employers could review their wellbeing strategies and the support they offer to colleagues. Having some wellbeing support in place during this time is critical. For example, having employee assistance programmes in place which are independent helplines that employees can use to get advice both financially and for any mental health challenges they may be experiencing as a result of the cost of living crisis can be invaluable. Alternatively, ask a local financial adviser to come in and run clinic style sessions with individuals that might like it. This kind of support could help employees to manage finances and stress and build resilience, so they are in a position to take control of the situation and maybe not need to take up a second job.

Financial wellbeing

Employers should recognise and understand that financial pressure is a significant contributor to poor health and wellbeing.  Therefore, they should try to support employee financial wellbeing as much as possible, while not putting the business in a precarious position. For example, Sainsbury’s has recently hit headlines by providing its lowest paid front line colleagues with a 7.5% increase, the third in a year, it has also increased the rate of discount that colleagues receive from 10% to 15% to support colleagues with the cost of a shop.

Flexibility

If employees have no other option and the business is no position or too stretched to provide salary increases in line with cost increases etc, then businesses should try to be as supportive and flexible as possible of the colleagues’ circumstances and not stand in their way if they wish to take up a second job. For example, a lot of organisations have clauses written into employee contracts and policies that they can’t take up a second job, which could be relaxed. Refusing additional employment could cause more stress for the employee.  It could also cause reputational damage or conflict in the employment relationship.

Employees should also be as open and honest with the employer and their managers about the circumstances they are facing and ensure they are asking for support should they need it. Many employers value their employees and if they are aware of a problem may try to support them.  This can add value to the employment relationship and improve retention in the long term.

Sources:
UK savers in cash ISAs losing out on £26.7bn in interest with inflation at 40-year high – IFA Magazine
Bank of England warns of future UK rate rises if inflation persists | Financial Times (ft.com)
One in 10 UK teachers forced to do second jobs ‘to keep eating’ amid rising costs | Education | The Guardian
‘I’m knackered’: people forced to take second jobs amid cost of living crisis | UK cost of living crisis | The Guardian
Decreasing GDP, Brexit Woes & Inflation: As UK Economy Shrinks, Here’s Why it is Seeing a Record Fall (msn.com)
UK credit card borrowing soars to highest monthly level since 2004 | Consumer spending | The Guardian
Decreasing GDP, Brexit Woes & Inflation: As UK Economy Shrinks, Here’s Why it is Seeing a Record Fall (msn.com)
Food banks struggle with ‘tsunami of need’ as donations drop | The Independent
Struggling to afford heating bills, Britons turn to ‘warm banks’ to keep out the cold | Reuters
Third of workers have looked for a second job as inflation rises, research finds (peoplemanagement.co.uk)
Sainsbury’s to pay at least £11 an hour for 127,000 lowest-paid workers | J Sainsbury | The Guardian