is a question that employers constantly ask me – what should we do? And what are the others doing? Some of Britain’s biggest companies are assessing whether and how they should support their workforce during the cost of living crisis, and with good reason.
Employee financial difficulties are costing companies dearly. The Center for Economics and Business Research found that 10% of UK employees have missed work due to financial issues – that’s a lot of stress-related absences. Another fifth of the workforce was less productive due to financial anxiety. Do the math and we could be looking at a cost of £6billion a year to businesses.
The business case for dealing with the crisis is compelling – and people will expect their employers to do so. Things will get worse after summer, when we all have to turn the heating back on. The government’s £400 home energy grant is a start. But that won’t be enough.
COVID-19 has demonstrated the need for employers to take a more person-centric approach to their workforce. Once the pandemic hit, leadership teams quickly looked at how they could support their staff and we saw an increase in the human-centered approach to leadership. 48% of employees surveyed in EY’s Work Reimagined Employee Survey felt the corporate culture had improved post-pandemic, with an emphasis on employee well-being.
Then came the Great Resignation as people started quitting their jobs in droves. Businesses keep hearing that talent acquisition is much harder – it’s not going away anytime soon.
Meanwhile, candidates are communicating their value much more candidly. It’s not just about wanting more flexibility or even higher salaries, it’s about companies demonstrating value through empathy-driven initiatives.
Hanson Search survey last year showed that company values, people and community were more important than salary in what people were looking for in a career change. This means that companies must not only live and breathe their values, but also implement them in a tangible way.
The most obvious way to achieve this is through financial incentive. Companies consider raising base salaries take a leading position in the market. Others are considering or offering lump sum payments of between £500 and £1,500 to their workforce to help with energy bills or unexpected costs that may arise.
This isn’t necessarily the best approach though. Low-income members of the workforce are disproportionately affected by this crisis, so an overall percentage wage increase may not have a positive impact. On the contrary, it could tip some into the next income tax rate, while simultaneously increasing the salaries of high-ranking employees – which is not a good message.
Then there are “lighter” perks – breakfasts and lunches, food stamps, and in-person wellness initiatives. The underlying idea is multiple: provide a comfortable working environment and talents will be encouraged to travel, saving them money throughout the day while demonstrating your values and developing a community culture.
So what’s the best course of action for bosses? Employers who have not reviewed their wages for some time should do so without delay. But they also need to develop empathy in their retention and acquisition of talent.
Just as we’ve seen pushes toward brand authenticity, brand values, and brand impact, empathy may well be a presiding differentiator between companies that survive and thrive in the years to come. come, and the companies that don’t.
Although the UK workforce may face significant challenges, it also has significant opportunities to permanently change the perspective of work. The reality is that workers hold all the cards.