As we approach Christmas, many employees are feeling the pinch as they begin ticking off their gift and food lists. In fact, according to VoucherCodes and the Centre for Retail Research (CRR) the average British household expects to spend more than £820 on festivities – that’s a staggering £21 billion splashed out on presents, food and drink, parties and decorations. And, despite Brexit fears, it’s more than last year.
Adults will spend an average £244 each on gifts, up 1.3 per cent on last year and 51.5 per cent more than the European average of £160.82.
It’s true to say the economy receives a bit of a boost as a result – but that doesn’t mean to say it is strong, and at what cost is this frenzied spending activity to families up and down the country? Many employers seek to help ease the pressure, by paying December salaries much earlier in the month. But does this really help, or does it just encourage people to spend much more than they can really afford?
Getting your pay packet a couple of weeks early is great for Christmas shopping sprees, but it also means a six week wait for January’s salary. With fewer and fewer workers receiving bonuses at this time of year, it’s understandable that companies feel they are doing all they can to help by paying early. Research – this time by Comparethemarket – suggests that nearly half of Brits take up to six months to clear their Christmas debt and more than 80 percent repeatedly overspend every year in December after receiving their early pay.
It means, in January, many must rely on credit cards, payday, bank or family loans once their money runs out.
And the Money Advice Service is expecting a surge in the number of people seeking New Year debt guidance, as people in need seek support. For many employees, surviving financially in the month of January is likely to be a struggle. This, coupled with the fact that more than two in five workers are likely to be paid early means that a potential 13 million people will have a longer wait until January payday.
Andy Webb, money expert at the Money Advice Service, commented: “Our message in January is simple. If you are struggling to survive financially next month, it’ll be time to act. There are simple things you can do to get your finances back on track.
“Firstly, look at your regular spending at home and keep track of it throughout the month. Doing this will help you see the areas where you maybe able to cut back, for example: cancelling unused subscriptions. You might be able to raise some extra money by clearing out items you don’t want or no longer use. Also, don’t underestimate how much you waste if you throw food away – plan your meals carefully and use up your leftovers.
“If you’re worried about money you owe, then it’s best to get advice as early as you can. The Money Advice Service is here to help. We work with a range of partners to offer practical solutions to enable you to get your finances back on track.”
On a more positive note, many firms offer people the chance to decline an early pay packet. And there are those who take them up on it. So what else can employers do to make the festive season a happy one for both business and workers?
According to comments on Indeed, furniture giant Ikea gives staff ‘great Christmas presents, a party – and even a free lunch’. And many other employers follow suit – with far fewer offering bonuses.
Research from XpertHR from last Christmas reveals the majority of companies celebrate Christmas by hosting parties or departmental Christmas lunches – but there are fewer gifts or additional time off for employees.
Firms planned to spend an average of £93.33 and a median of £50 per employee on their Christmas celebrations. Sheila Attwood, managing editor Pay and HR practice at XpertHR said: “We are seeing many employers holding tightly to their purse strings and being cautious about spending on staff gifts and bonuses.”
Although the majority of organisations in the survey closed for Christmas Day (82.1%) and New Year’s Day (77.4%), employees looking forward to additional time off were disappointed, with only one in eight (12.3%) employers offering this benefit over the 2016/17 festive season.
Traditionally, businesses that expected employees to work during Christmas and New Year tended to award bonus payments – but there was an increase in the number of companies offering time off in lieu instead.
So how about the traditional party…and the many risks involved? Yes, that’s right, festive celebrations are packed full of potential physical and psychological hazards. Although employers may be held indirectly liable for harm caused to other workers or third parties by their employees during company festive celebrations, nearly six out of 10 companies admitted they didn’t have a policy in place – setting out acceptable standards of behaviour.
Where advice is offered to employees attending parties, it most commonly covers not to drink and drive (37.7% employers) and providing information on transport options (20.9%). Some firms provided transport home, whist others paid for overnight accommodation.
Sheila Attwood continued: “Everyone wants to let their hair down during Christmas celebrations but, in order to mitigate risk, employers need to have clear policies in place about what is and isn’t acceptable behaviour. This needs to be communicated well in advance to make sure employees understand there could be serious consequences for unacceptable behaviour.”
Christmas is the time of year for employers to sit back and take stock. And – whether in the form of bonuses, time off, parties, lunches or gifts – it’s the perfect opportunity to reward workers for their efforts during the previous year.