How to support your staff with the rising cost of living
Read time: 3 mins Added: 02/12/2022
Supporting your staff through tough times can help them and your business become more resilient.
Staff distracted by anxieties over rising prices can find it hard to focus on day-to-day tasks. Perhaps fuelling these anxieties is the news that the Scottish economy is forecast to contract in 2023. Meanwhile, inflation is running at a 40-year high, driving price rises across the board. For many, it’s the impact on essential items that’s most obvious. According to the Office for National Statistics, food inflation reached 14.6% in the year to September 2022, driven by the war in Ukraine and the high cost of feed and fertiliser.
Business costs set to increase
Energy prices also remain high despite the cap on unit prices until April 2023, increasing the costs of transport, heating, and lighting. The hidden cost of inflation is the toll it takes on individuals and it’s likely that many employees are finding the rising cost of living hard to manage.
A recent report from the Scottish Government, for example, estimated that around 35% of households in Scotland are experiencing fuel poverty. Borrowing costs are also rising, with many mortgage and loan holders feeling the pinch from rising interest rates as the central bank tries to manage inflation.
Extending support
In response to the rising cost of living, the Scottish Government has announced a £3bn package of support across energy bills, childcare, health, and travel, as well as social security payments specific to Scotland.
So how can business owners help? When your own overheads are increasing, it can be difficult to balance the needs of your staff with running an efficient business. This may be a particular issue for sectors that are already facing staffing pressures or shortages, such as retail and hospitality, or education. Other sectors may be struggling to find staff with appropriate skills, or like real estate, managing demand pressures. But businesses that support staff wellbeing could benefit by creating a more satisfied and productive workforce and retaining the talent and skills they need.
Ways you can help your staff
Here are some steps you can take to support your staff and build a more resilient business.
1. Be open – share how the rising cost of living is affecting you and your business and how you’re managing it. Being honest and transparent can help strengthen relationships.
2. Review your wage structure – ensuring that your lowest-paid employees are earning a ‘Living Wage’ is a good first step. Almost 3,000 Scottish employers have signed up to the scheme, and 80% of them believe it’s improved the quality of work of their employees. If you can offer inflation-matching wage increases, that’s great, but fair and competitive pay is a good starting point.
3. Take a look at your broader employee benefits package – financial support doesn’t have to mean an increase in salary. Offering employee discounts on your own products or salary sacrifice schemes in exchange for childcare vouchers or travel cards can help. Other incentives, such as schemes that promote car-sharing or cycle-to-work could help employees manage rising transport costs.
4. Flexibility – hybrid or homeworking could reduce commuting costs where flexibility works. You could even consider implementing an ‘income streaming’ service to allow employees to draw down some already-earned wages before payday, giving them flexibility to avoid payday loans.
5. Financial processes – automating your payroll to ensure it is accurate and timely can reduce employee worries. Other tools such as accounting software, for example, can reduce your admin time while helping to manage your finances more efficiently.
6. Wellbeing – offering mental health support can make staff feel supported. Through our partnership with Mental Health UK, we have created a range of resources to help businesses support staff wellbeing and mental health in the workplace.
7. Focus on the long term – talking to staff about the long-term benefits you offer, like your company pension scheme, can be reassuring. External resources like the government’s Money Helper service are also on hand to help your employees with their personal finances and many banks have also set up helplines to support customers.
As the cost of living rises, so does the cost of running your business. We’re here with the guidance, funding and support to help you thrive today and tomorrow. Visit our business costs and uncertainty hub.