Combatting the cost-of-living crisis before it becomes a cost-of-work crisis

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Since lockdown restrictions ended, more and more employers have been mandating a return to the office for their remote employees. However, the continuing cost-of-living crisis means many workers are worried about the financial and mental strain of travelling to the office full time – which in turn means employers could face push back from staff. 


According to HR analysts at Gartner, one of the top workplace predictions for 2024 is that the cost-of-living crisis will become a ‘cost-of-work’ crisis, as more employees are being instructed to travel to a physical workplace. 


“Employees who have been working remotely or in a hybrid environment have experienced what it is to work without bearing the costs – financial, time and energy – associated with going into an office daily,” says Gartner. “As many employers implement a mandate for remote employees to return to the office after long periods of remote work, employees now have a sharper awareness of what they ‘spend’ to go to work.” 


The issue has been brewing for a while now. A survey of nearly 3,500 professionals from the US, UK, Australia, and Canada, conducted by Adaptavist back in 2022, found that 44% of UK respondents were worried about the additional costs of working in an office if they return full time; while just over a third of all respondents were anxious about going back to the office, with the commute cited as the main cause of stress. 


Providing financial support 


Gartner suggests that employers could deal with the challenge in two ways – by sharing any costs involved in returning to the office, or by finding ways to cut costs for employees, such as providing housing subsidies or financial wellbeing programmes. 


Yet what other ways might businesses offer different benefits, and support the financial wellbeing of their remote employees facing office returns? 


“Financial wellbeing extends far beyond daily travel costs, and millions of working households are still reeling from the biggest squeeze in living standards since comparable records began,” remarks Steve Herbert, HR and employee benefits expert. “Employers should therefore look to promote any of their employee benefits that support the personal finances of employees – and add additional tools where possible. Some low-cost offerings might include season-ticket loans, debt counselling advice, salary sacrifice schemes, employee discount portals, pensions, and employee health cash plans.” 


Providing financial education is one of the most practical and effective ways to help employees to manage their money better, he adds. “The majority of the UK’s working population has never received any formal financial education, and providing workers with access to financial education tools will help the monthly pay-packet go that bit further, both in a cost-of-living crisis and beyond.” 


Nicki Robson, managing director of HR consultancy Breedon Consulting, agrees: “Hosting financial wellness workshops on topics such as budgeting, saving, and investing can equip employees with valuable tools and knowledge to improve their overall financial wellbeing during the transition back to the office.” 


Other ideas include offering flexible start and finish times, so that employees can avoid peak time travel costs, as well as discounted train passes or car parking. 


“Employers could also consider if there is any way they could encourage their staff to attend the workplace whilst also assisting them financially,” suggests Kate Palmer, employment services director at Peninsula. “For instance, they could offer breakfast or lunch on a regular basis, which means their staff do not have to pay for food on those days. An employee assistance programme (EAP) for staff to access advice and support is also another option to help them with their financial wellbeing across different aspects of their life.”  


Facing up to the challenge 


Yet offering financial support to employees is not without its challenges. For instance, employers may be under pressure to provide such support, but they could be feeling the pinch of the current economic situation too. 


“They might find themselves in a difficult situation of trying to balance providing support and benefits for their workforce with the rising costs that they are also facing,” remarks Kate Palmer. 


Plus, individual preferences vary, and different employees may have diverse needs and priorities, adds Nicki Robson. “Tailoring benefits to accommodate these differences poses a challenge, as there is no one-size-fits-all solution. Additionally, over time, these support mechanisms may become the ‘norm’ for employees, requiring employers to periodically reassess and adapt their offerings to maintain impact and effectiveness.” 


The key to ensuring all pay and benefits offerings are a success lies in effective communication, says Steve Herbert. 


“However robust the employee benefits offering, it will only achieve its maximum impact if employees are aware of the tools on offer, regularly reminded of these benefits, and know how to access them when needed,” he comments. “Effective benefit communication will ensure that the employees get the most value from the support available, whilst also potentially improving the employer’s return on investment for each and every benefit provided.” 


The risk to retention and experience 


Mandating a return to the office, in the current economic climate, could also have a negative impact on employee retention and experience. Employers therefore need to be aware that cash-strapped workers may be considering leaving their jobs in search of a better salary or the flexibility that remote work offers them. 


Research of over 53,000 global workers by PwC in 2023 found that 26% of employees plan to leave their job in the next year – up from 19% in 2022 – with the cost-of-living playing a key role in this. 

“One concern is that employees, having become accustomed to the flexibility and convenience of remote work, may perceive a return to the office as a step back in autonomy and work-life balance,” warns Nicki Robson. “The shift from the freedom of remote work to a more structured office environment may lead to dissatisfaction among employees, impacting their commitment to the organisation. 

“In industries where remote work is possible, employees may seek work elsewhere, presenting a risk to retention rates,” she continues. “The allure of remote work has become a significant factor in talent attraction and retention, making it crucial for employers to carefully consider the implications of mandating a return to the office.” 

The key question, says Steve Herbert, is whether a return-to-work mandate is really going to improve output, productivity, and the overall bottom line. 

“The UK is now four years on from the start of the pandemic restrictions, and many employees have accordingly reordered their lives around the assumption of working from home and the better work-life balance this can provide. To suddenly remove this flexibility will land badly with some and will probably result in many experienced employees seeking alternative employment. It follows that the damage from such losses may well outweigh the perceived positives of a forced return to the physical workplace.” 


Are employers doing enough? 


While many employers are committed to supporting the financial wellbeing of their employees, is there more they could be doing to reduce the financial stress for those in need? 

“While employers contribute by offering support and tools, it’s crucial to acknowledge that individual responsibility for financial wellbeing remains paramount,” remarks Nicki Robson. “It’s important to recognise the varying financial capacities of businesses. Not all employers have deep pockets. But if they are implementing the support they can afford, to guide and nurture their employees by providing access to help and benefits, this is enough.” 

Sam Lathey, CEO of financial wellbeing platform Bippit, says employers must understand that it’s an employee’s relationship with money, in addition to their objective financial situation, that dictates their financial wellbeing.  


“Overall, financial wellbeing support must mature into empowering solutions that enable individuals – who all have unique situations – to take control of their relationship with money and drive accountability and long-term, positive behavioural change.”