Solutions For Employers In Dealing With The Cost-of-Living Crisis
In recent years, businesses have encountered a series of unprecedented difficulties. From the challenges posed by events such as Brexit, COVID-19, the war in Ukraine, and the resulting energy shortage, it appears that one crisis subsides only to be replaced by another.
Regrettably, the current situation is unlikely to witness any significant improvement in the near future. The Bank of England has officially announced that the British economy is facing a recession, accompanied by a staggering 40-year high of 10.1% inflation earlier this year.
Industries across various sectors are facing difficulties in hiring new employees due to the decreasing unemployment rates and their negative impact on business expansion. Recent findings from a study conducted by the Office of National Statistics (ONS) reveal that the number of working-age individuals who are unable to work due to prolonged illness has reached an all-time high of approximately 2.5 million. This report also highlights the consistent rise in economic inactivity observed in the past few months.
In light of the intensifying cost-of-living challenge, it is imperative for employers to take into account the potential impact of these factors on their employees. Neglecting to do so would mean that individuals are left to handle surging expenses on their own, which may result in dissatisfied employees seeking higher compensation elsewhere. In the current economic climate, no business can afford such a situation.
In this challenging period, how can you provide assistance to your employees?
Conduct Salary Reviews
According to a study, more than 50% of workers in the UK would be inclined to continue in their current jobs if their salaries were increased. Therefore, it is vital to thoroughly and transparently assess and adjust employee compensation to ensure it is not negatively affected by inflation.
Along with salary hikes, numerous companies are providing bonuses to their employees, ranging from £500 to £3000. These bonuses can either be a one-time payment or an additional supplement to their regular pay. Some clients have already dispensed these bonuses, while others are incorporating them into the November payroll to offer additional assistance in preparation for the holiday season. This initiative aims to inform employees about the various forms of remuneration offered by companies, such as bonuses and pay increases, and how they are being implemented to provide support during the festive period. The language used is neutral and accessible to knowledgeable readers in a general context.
Rethink Benefits Packages
It is currently a favourable moment to assess the adequacy of your employee benefits package. Although providing financial incentives may be challenging, there are several alternative methods to ease the financial strain on your staff.
Many companies now provide remote and flexible work options, which can help employees save on commuting costs during peak hours. Additionally, some companies offer benefits like staff discounts, salary sacrifice programs for cycling to work, healthcare and childcare assistance, and the option to sell unused vacation days (as long as the employee has utilized the minimum required by law). If you are looking to find a new role in finance you can get in touch with a financial recruitment agency. They have knowledgeable consultants who offer a full range of recruitment solutions for roles including Finance Manager, Financial Controller, Finance Director, Head of Finance and CFO. They also assist businesses of all sizes.
Encourage Open Communication
The apprehension associated with discussing financial concerns can lead to feelings of anxiety and seclusion during challenging times. Nevertheless, a significant majority of British adults, approximately 77%, have expressed varying degrees of worry concerning the escalating expenses they face. Consequently, it becomes imperative to establish an environment that is inclusive and free from judgment, enabling individuals to openly communicate their apprehensions.
Managers may need to undergo additional training to effectively assist their teams during this period. Even individuals who possess a thorough comprehension of the cost-of-living predicament might find it beneficial to acquire new skills in order to effectively handle challenging discussions with anxious employees.
Support Work-life Balance
Numerous employees have expressed a deterioration in their psychological well-being in recent years, a concern that is expected to be worsened by the ongoing cost-of-living crisis. Implementing initiatives focused on well-being and advocating for a harmonious equilibrium between work and personal life can significantly contribute to employees feeling valued and supported, thereby diminishing the likelihood of burnout.
Offering an employee assistance program (EAP) is an effective method to ensure that your employees have access to free and confidential guidance regarding personal concerns that may be causing them stress both at work and in their personal lives. By implementing a top-quality well-being program, you can enhance employee satisfaction, decrease absenteeism, and foster a more contented and productive workforce.