Navigating Through The Cost of Living Crisis as an Employer

In this day and age, four words have caused nationwide panic — Cost of Living Crisis. The price of just about everything is rising constantly, and the public’s ability to match that hike is deteriorating at equal speed. As an employer, how can you help employees with these growing financial demands? 

Can More Money be the Solution?

If you ask any employed person in the UK how they would like to be helped— “with more money”, will be a common answer. They aren’t wrong; the more money they have, the easier it becomes to pay for basic things like food, gas and electricity. However, it is not just the employees but employers, as well, who happen to be just as affected by this cost of living crisis.

As an employer, you may consider laying off staff. This has been the case with businesses during the peak pandemic period, and it’s no different now. This isn’t an ideal solution as employees may often feel the process to be unfair. And in a few months down the line, you could have an unfair dismissal claim to deal with. But with businesses taking the hit, it is becoming increasingly difficult to offer help in the form of a pay hike (which is most desirable).

While most employment contracts mention salary hikes, it is rarely possible for employees to demand them. Stephen Norton, a lawyer at Redmans, says “If an employee’s contract stipulates a right to an annual increase each year then they will be in a strong position to argue for one, but this is unusual. A pay increase could more likely be based on individual performance or the performance of the company, in the private sector. In the public sector, pay may be based on pay review bodies or the rate of inflation

Added Benefits During Cost of Living Crisis

When money is not the answer, compassion is. As an employer, it is an absolute necessity to speak to the employees and see what they need, during this time. If their worries are related to travel costs, offering a remote/hybrid model that offers flexibility, as well as a chance to save money, could be the answer. On the other hand, if they plan on cancelling their gym memberships, offering discounted memberships may help.

In addition to these benefits, offering employers a way to preserve their mental health and well-being can be a great advantage. The cost of living crisis can negatively affect people and, as an employer, offering counselling and advice services can be beneficial. Providing a safe and confidential space for employees to discuss their problems and how to tackle debt can go a long way.

In an attempt to tackle debt, a lot of employees may look at taking up second jobs. Not a lot can be said in this regard since Working Time Regulations only allow 48-hour weeks. Plus, working two jobs can adversely affect the employees and, ultimately, the company’s performance. However, shortening the work week to two or three days may allow some employees to take up additional work. The only thing to take into consideration is their employment contract which seldom allows multiple jobs. As an employer, it is important to consider employees who may need to work more and possibly allow a few changes smoothly (and legally!)

Navigate With Ample Communication

In a nutshell, opening up lines of communication to hear what the employees have to say is important. Not everyone will want a pay hike, given its impracticalities. In such a case, many may come up with alternate solutions. It is in your hands, as the employer, to give it a thought and consider the advantages.

That being said, employers are not obligated to keep promises or try for something beyond the company’s ability. This is especially the case when the company is small and unable to accommodate frequent pay hikes or benefits. In such cases, directing employees towards the right helplines and agencies is also a huge help. Stephen Norton adds that agencies like Citizens Advice Bureau or debt services are just some agencies employers can provide information for.