The UK cost-of-living crisis began in late 2021 and shows no signs of letting up as 2023 unfolds. Prices continue to rise, and recession looms.
Almost three-quarters of people (72%) (HR Magazine) worry about money at least once a week, and a similar proportion (76%) say it's affecting their mental health.
And, rightly or wrongly, fewer than one in three employees (30%) think their employer cares about their financial health.
Businesses are feeling the impact of the ongoing crisis in many ways, from the financial pressures of unbudgeted pay rises, staff jumping ship for higher salaries, and employees' poor attendance and performance (People Management) due to financial stress.
And the longer the crisis goes on, those companies that introduced 'sticking plaster' measures to get through a difficult time are now having to rethink their employee support, ensuring initiatives are strategically embedded and sustainable in the long term.
While cost-of-living concerns contribute to pay being the main reason people are job-hunting (71%) (World Economic Forum), encouragingly, job fulfilment and other 'culture' factors such as flexibility and opportunities to progress remain important factors in job retention.
So, what cost-of-living-crisis support are companies offering, and how else are they encouraging staff to stay during these challenging times? This is what we got our panellists – all featuring in the top 100 Best Companies league tables – to consider at Best Companies Live Q1 2023.
This article shares highlights from the conversation. If you would prefer to watch the full session, please click the video at the top of this page.
From Brexit to the pandemic and the cost-of-living crisis, the hospitality industry – and its hard-working employees – has faced a raft of challenges over the past few years – challenges The Rick Stein Group is consistently rising to.
"We can treat everyone individually, but we also have to have our eyes on the ball to run a sustainable business. So, the decisions we make now have to be right for now and the future", says Michael Rabone, Head of Human Resources.
And it's this thinking that's led to the company prioritising the introduction of a service charge over price increases, with 100% going to its team – the company takes nothing out. "We're proud that this values-based decision has enabled our team to share over £1m in extra tips between them," adds Michael.
It's easy to take knee-jerk decisions – ones that come from a good place but inadvertently lead to greater inequality creating more challenges than they solve. When the so-called 'great resignation' started to bite, head hunters were swarming, but IT and cyber security services firm, ramsac, took measured action. This is also helping it through the cost-of-living crisis.
"The first thing we wanted to do was to make sure what we were paying was in line with what the industry was paying, so we got a third party to benchmark", says Rob May, Managing Director.
"What we were paying was right in most departments but not all, so we did banded pay increases in those departments before we did anything. Pay increases and cost of living payments came next."
And, for ramsac, percentage pay increases alone were not the answer.
"We recognised that if you give a flat percentage increase across the board, people at the top end of the earnings scale do much better than people at the lower end, leaving them feeling the punch rather than the pinch. So, we gave everyone a five per cent pay increase, but we also made cost-of-living support payments. It meant people at the lower end of the earnings scale were getting the equivalent of a 10 to 11 per cent pay rise."
Your business set-up may knock the competition out of the field in good times, but be prepared to re-visit it when the going gets tough.
Employee-owned business support company UMi is focused on building a business for the long term. Its people have a stake in it, shaping its culture and values and gaining a fiscal benefit, but Nicki Clark, OBE, Chief Executive, says the current climate is challenging.
"The cost-of-living crisis is now. It's urgent. So, the principles of employee ownership – that long-term value over short-term gain – are in direct conflict with the needs of people in the current crisis."
But for Nicki, UMi's strong relationship-based culture is helping everyone through.
"We are naturally very connected as a team. We talk a lot. We understand what goes on in each other’s' lives, so we're making individual decisions, rightly making sure they are fair for all. We're adjusting to how we do things."
And for UMi, like many organisations post-pandemic, it's about embracing flexibility, with the hybrid working model supporting staff to manage their budgets. Those most impacted by high travel costs benefit from more home working, and those most concerned about high fuel bills can choose to spend more time in the office.
"It's about being an 'intentional office,' says Nicki. "Operational productivity goes through the roof when people are at home, but we put more value on 'cultural productivity' when people are in the office – collaborating and chatting."
Is your senior leadership team doing a lot of talking and not much listening? This was feedback DF Capital received in its Best Companies employee engagement survey. And the personal savings and capital lending bank quickly addressed it through a 'colleague voice.'
"It involves 15 to 20 people across the organisation – all levels of seniority, types of roles and background – getting together around a table and reading the mood music of the organisation and bringing feedback from their teams," says Charlie Michael, Chief People and Sustainability Officer.
And it's led to initiatives like a colleague charter on how staff speak to each other and a new diversity and inclusion network.
"We call it 'culture hacking,'" adds Charlie, "It's not just about the one point in time when you do a survey but talking to your people every single day to understand how to create a better place to work."
Employees may need more cash in their pockets now, but they're also keeping an eye on the future. Being clear on what opportunities your company offers and how to get there can be the incentive to stay.
"Our 'Spotlight' approach is about ensuring our employees understand their pathway for growth and what they need to do to meet their goals," says ramsac's Rob May.
"Our Spotlight meetings are specifically around 'what are your ambitions?' And ambitions are different for different people. Some people are very comfortable doing their role; they just want to be brilliant at it. And other people want to change the world. It's 'how can I get your job?' Spotlight has been really well received."
It's clear that the cost-of-living crisis will continue to test employers and employees for the foreseeable future. But our panellists have demonstrated that decisions must be sustainable and reflect an organisation's values. Continuing to build employee trust, involving them in decisions, and investing in their future (as well as offering fair salaries) may put the balance in your favour when recruitment companies come knocking.
How well do your employees feel supported through this cost-of-living crisis? You may have taken action, but have your efforts been recognised, and are they the right ones? Find out if you're on the right track with the b-Heard employee engagement survey.
World Economic Forum: https://www.weforum.org/agenda/2022/06/the-great-resignation-is-not-over/