A Cost-of-Living Crisis Review: What Employers Can and Should be Doing

The cost-of-living crisis continues to be front of mind in our news and our daily lives. According to a recent report from the ONS, nearly a quarter of adults reported that they were finding it difficult or very difficult to pay their usual household bills, with worries extending to energy bills, mortgages or rent and savings.

Of course, organisations across the country are seeing the impact of the cost-of-living crisis too. Many employers are facing calls for pay rises or one-off bonuses. But, with prices rising across the board, blanket solutions simply might not be practical for many employers to implement.

So, what can you do to support your workforce through this period of economic uncertainty, and what should you be aware of as an employer regarding employment law?

Be Open About Benefits

As an employer, we might assume that our employees fully understand the benefits offered within the company.

However, it is wise to review benefits with employees so that they feel supported and aren’t missing out on ‘easy wins’, such as salary sacrifice schemes where their entitlement to cash pay is reduced (usually in return for a non-cash benefit, including childcare vouchers and cycle-to-work schemes), to result in reduced tax and/or national insurance contributions.

Don’t be afraid to identify the most vulnerable; consider whether their pay package is doing enough.

You may want to consider using pay rises or one-off payments, but you still need to ensure pay outcomes and processes are fair. Always be wary of unfairness, potential discrimination and unintended consequences.

For example, a pay rise might be detrimental to some as it might affect their benefits or tax credits. Vouchers, or an alternative, might be a better option in these cases.

Employee Wellbeing: Be Aware and Understanding

The cost-of-living crisis is having far-reaching consequences on many, including adverse effects on staff well-being, mental health and performance.

To offset this, you would do well to treat your staff with dignity and respect so that they feel able to ask for help. Staff forums and networks – which should always sit alongside the opportunity for confidential conversations – are a great way to canvas views and get a broader feel for genuine needs and difficulties.

If you don’t already have one, consider introducing a financial well-being policy so your employees know what help is on offer and how to access it.

In bigger organisations, you may need to consider training your management teams to ensure they are properly equipped to have these conversations effectively, compassionately and without discrimination or prejudice. Wherever possible, encourage an open forum or peer-to-peer support.

Identify ‘Easy Wins’ that Work for Your Employees and Your Business

There may be a few ‘’easy wins” you can implement to boost staff morale and improve financial outcomes:

• Make sure payroll is prompt and correct, including any overtime.

• Review your benefits package – do your employees know what it includes and can you do more?

• Where possible – having considered the legal and practical implications of doing so – allow employees to take on a second job to cover rising costs.

• Be creative about measures that might help, such as coordinating carpooling efforts, and providing free sanitary products and subsidised meals.

• Consider allowing staff to sell back any unused contractual holiday entitlement (not statutory).

• Discuss hybrid (remote) working arrangements, flexible working or a reduced working week.

Remember again that what might work for some staff might not for others. For example, while one member of staff may wish to work from home to reduce travel or childcare costs, another might find working in the office preferential in terms of reduced utility bills.

Also, don’t forget that working more than a 48-hour week may have further detrimental effects on well-being and performance. So be mindful of the Working Time Regulations, if offering overtime or facilitating second jobs, as ultimately, employers are responsible for the health and safety of all staff and for making sure that their working hours do not pose a risk to themselves or others.

Overall

Whatever your response as an employer – be it loans, pay rises, one-off payments or permitting second jobs – communication, flexibility and compassion should remain central to your response.

Be sure to ask how you can best support individual employees. Be transparent where you can and avoid solutions that may be detrimental or discriminatory.

Above all, by acknowledging this current crisis with your staff and trying to maintain a positive ethos and working environment, you should be able to better support your workforce through this difficult time.

If you would like any further advice, contact Sara Mayhew at sara@sara-mayhew.co.uk