The responsibilities of HR extend far and wide, from ensuring the satisfaction of all those in the workplace to remaining in line with the policies and budget set by their employer, which dictate their means of executing this. Your HR team faces a set of fresh and daunting challenges, brought on by the recession and cost of living crisis. As of October 2022 almost half of adults were finding it difficult to afford their bills, and the number is rising.
Every worker under your employer will be struggling to different extents and in different ways, so the practices HR bring in to combat both the rising bills and stress must be flexible, long lasting, and meaningful. It's important to demonstrate to every worker that HR and their employer will support them through this crisis, not just through a happy workplace culture or mental health days, but also with real, tangible change. This can come in many forms, from an updated benefits package, taking a new attitude to performance reviews and productivity, or a pay rise in their salary. Keep reading to see our advice and ideas on how HR can play their role in cost of living crisis support for staff effectively.
But first, what is the cost of living crisis?
The cost-of-living crisis is an ongoing event in the UK which had its start in 2021, in which the price of many essential goods began increasing faster than the income of households, resulting in a fall in real incomes.
There's no sign of this improving yet. The latest Bank of England forecast has inflation peaking at 13.1% in the fourth quarter of 2022. Inflation is expected to remain high for the next two years: the Bank expects that inflation will not reach its 2% target until the third quarter of 2024.
Directing your people towards support is part of your responsibility as an employer. Even if you do not personally suspect any of your employees are particularly close to crisis, inflation has caused a decent salary to stretch less and less, and you never know what could be happening in the personal lives of your employees. You may want to share this page, which offers government cost of living support for the household.
How can your HR team help your workforce?
Review your benefits package
Reviewing what's included in your benefits package and updating it to offer more options and higher quality support for staff can be a major player in improving their overall wellbeing.
This could include:
- covering the costs or offering a discount on childcare with providers you're in partnership with, having onsite childcare options at your office
- discounts at local cafes or markets, which covers the employee and their family members, to improve their access to affordable food
- Covering the cost of transportation for employees who want to work in office. Some may be struggling to heat their homes adequately or buy as much food as they did previously, so having access to a warm office with refreshments available may be attractive - but the costs of transport can be a significant obstacle.
- providing a monthly subscription to something like perk box, which could include nice toiletries, snacks and other small gifts which are practical and show your support
You may also be interested in a salary sacrifice scheme, to allow your employees to access more benefits.
This might also be a good time to review what kind of wage your employees are on - are you paying them enough? This is a crucial time to consider giving them a pay rise - particularly those who are more junior and receiving a less significant income. While we like to think we know our colleagues well, this is not a good time to make assumptions about their personal or financial situations. Soaring energy bills and rising rent are impacting everyone's mental wellbeing as their salary won't be stretching as far, but could be especially hard on carers, single parents, and those paying off debt. Therefore offering a meaningful pay rise will be greatly appreciated.
Learn more here about the best perks and benefits to offer your people in 2023.
Create a supportive culture
It's inevitable that the cost of living crisis will have an effect on the mental health of your workforce. Stress levels will rise if the find they are struggling financially, which can also translate into their physical health suffering as high levels of stress have been linked to a loss of sleep, a loss of appetite, and an overall compromised immune system.
In light of this, the productivity and performance goals of every worker should be re-evaluated. When they have their performance reviews you're likely to see a sharp decrease in employee satisfaction if you penalise them for failing to meet goals without taking into consideration that their personal circumstances are likely to have changed. This does not mean you have to do away with any and all constructive criticism, but setting realistic goals in the first place and being mindful of how you deliver any criticism is crucial. This is particularly relevant if someone who is normally consistent in their performance suddenly has a dip during this crisis.
Foster a workplace culture where people feel comfortable having open conversations. These don't have to take place in group discussions or rooms full of people, but if you have a culture so formal and cold that a worker doesn't feel comfortable letting their manager or HR know if they are struggling, then you have a problem on your hands.
A way of learning what aspects of your culture need improvement is an employee satisfaction survey. You could send these out to your workforce weekly, fortnightly, monthly (whatever works best for you!) and allow them to fill it in anonymously with feedback, so that they are able to be honest.
If you think your company culture needs nurturing you might be interested in ways to rebuild your company culture.
Review your financial wellbeing policy
The CIPD recommends that a financial wellbeing policy should include:
- Signposting to financial wellbeing advice
- Revised benefits packages to include finance-friendly initiatives
- Offer financial education supports at appropriate times, such as ahead of maternity leave
- Committing to pay all employees at least the Real Living Wage
Offer mental health support in day to day working life
If you don't already, having a designated mental health first aider in your organisation, or even in each team if your organisation is quite large, could provide an extra layer of support. Mental health first aid refers to a training program that teaches members of the public how to help a person developing a mental health problem, experiencing a worsening of an existing mental wellbeing problem.
Build your communication strategy so employee's concerns are heard. As we previously suggested, employee satisfaction surveys can be a great opportunity to hear honest feedback. However, what is incredibly important is that HR actively follow up on these and explore the possible improvements. It is likely to cause even greater frustration in your workplace if people are taking the time to share their thoughts with their employer and then none of them are ever implemented.
Be more flexible about your workforce working from home or in office - different people will benefit from different things. While some may find the cost of transportation into the office too great to bear, others may find the comforts and friendly company of the office improves their mood.
Many people's financial wellbeing has suffered as we take our first unsettling steps into the UK cost of living crisis, and while enveloped in our own worries, it can be easy to forget that those around you may also be struggling with living in the crisis. It's important for the employer to do everything they can for their people to ensure their mental and financial wellbeing. This can be achieved through a pay rise, implementing a new benefit such as a discount scheme, and doing everything you can to create a workplace culture which supports every worker.
You may be interested in learning more about employee experience. If so, check out our employee experience survey of 2022.