Businesses have faced an unprecedented string of challenges in recent years. From Brexit and COVID-19 to the Ukraine war and subsequent energy shortage, it seems that as soon as one crisis eases, another takes its place.
Unfortunately, circumstances are unlikely to improve in the short term. The Bank of England has declared that Britain’s economy is officially in recession, with inflation reaching an eyewatering 40-year high of 10.1% earlier this year.
Most industries are also experiencing recruitment problems, with unemployment rates hitting record lows and stunting business growth. According to a recent report by the Office of National Statistics (ONS), economic inactivity has continued to rise over the past few months, with the number of working-age people not working due to long-term sickness climbing to around 2.5 million — the highest level ever recorded.
As the cost-of-living crisis deepens, it is your duty as an employer to consider how these factors might impact your staff. Failing to do so leaves individuals to manage skyrocketing bills without support — and could lead dissatisfied employees to seek better compensation elsewhere, something no business can afford in the current economic landscape.
So, what can you do to help your employees through this period?
Conduct salary reviews
Salary remains one of the biggest motivators for people looking for new employment, with one study finding that over half of UK employees would be more likely to stay in their current role if their pay was raised. So, reviewing your employees’ pay carefully and openly to ensure they are not left short-changed by inflation is crucial.
In addition to wage increases, we are seeing many companies offering bonuses — from £500 to £3000 — to all employees, either as a one-off payment or on top of a pay rise. Some clients have already processed these payments, whereas others are incorporating them into November’s pay to provide extra support ahead of Christmas.
Rethink benefits packages
Now is also an excellent time to review the suitability of your benefits package. It may be easier said than done to hand out financial incentives, but there are plenty of other ways to alleviate financial burdens on staff.
For example, many companies now offer remote and flexible work arrangements that can reduce the cost of commuting to the office at peak times every day. Others provide staff discounts, salary sacrifice schemes for cycle-to-work, medical care and childcare or sell back unused holiday days (provided the employee has used the statutory minimum).
Encourage open communication
The stigma around talking about money worries can make people feel anxious and isolated when times get tough. However, most people are feeling the pinch, with 77% of British adults saying they were very or somewhat worried about the rising cost of bills earlier this year. So, creating an inclusive, non-judgemental environment is crucial to ensuring workers can honestly express their concerns.
It might be necessary to provide additional training for managers to ensure they can provide the proper support to their teams during this time. Even those with an advanced understanding of the cost-of-living crisis may need to learn new skills to navigate difficult conversations with concerned employees.
Support work-life balance
Many workers have reported a decline in their mental health over the past few years — an issue that the cost-of-living crisis will likely exacerbate. Introducing well-being activities and promoting a healthy work-life balance can go a long way to making your employees feel supported and appreciated, reducing the risk of people becoming burnt out.
Providing access to an employee assistance programme (EAP) is a great way to ensure your staff can get free and confidential advice on any personal issues that might be causing them stress at work or home. Implementing a best-in-class well-being scheme can boost employee morale, reduce absenteeism and create a happier workforce overall.
At Howett Thorpe, we understand how difficult it can be to navigate the recruitment process in the current economic landscape. Our team of recruitment specialists works with clients to onboard and support candidates across accounting and finance, practice and business support roles — contact our Farnham office today at 01252 718777 to find out how we can help.