Workers all over the world are currently grappling with a skyrocketing cost of living. The post-pandemic inflation numbers are higher than ever. The UK’s June 2022 inflation rate is currently sitting at 9.2%, its highest rate in 40 years, while the Bank of England is projecting it to rise even further to 11% before it drops again.
The US is experiencing a similar crisis. The inflation rate in the US is also at a 40-year high, accelerating to 8.6% in May 2022. It hasn’t been this high since December 1981. The overall rise of prices is contributing to a cost of living crisis.
According to the most recent Cost of Living Ranking from Mercer, New York City is now the seventh most expensive in the world, with London not far behind at 15th most expensive.
Necessities are now too expensive for the average worker, according to the BBC, and wages are unable to keep up with the current inflation rates.
According to a BBC survey, over half of the 4,000 British people surveyed answered that they have been buying fewer groceries, and therefore skipping more meals. The same BBC survey found that two-thirds of respondents believe the UK government has insufficiently supported them through this crisis.
Downing Street recently said that they are treating the cost-of-living crisis as seriously as a pandemic. However, the economy is in a unique situation.
While the cost of living is surging, unemployment rates are as low as ever. Employee attrition rates are at an all-time high, as workers are unafraid to leave jobs that do not fulfill their needs, despite fears of a recession and ever-increasing prices.
Thus, employers who want to keep their workers need to step up and take responsibility to support them through inflationary challenges. To succeed in the ‘Great Resignation‘, employers must not leave their workers to suffer alone during this economic crisis.
Employers have a responsibility to help
While some employers will move to raise wages, that is not necessarily an option for everyone as a recession looms.
Instead, they can employ more creative means of support to show their employees that they are valued and that they will be taken care of in the wake of the upcoming recession.
One way of doing so could be a one-time cost of living bonus.
According to AdviserPlus‘s commercial and product director Michael Campbell: “If a pay increase isn’t feasible, a less costly alternative could be to offer employees a one-time bonus. This bonus isn’t tied to performance or yearly pay schedules like others. Instead, it can act as a cushion to support the blow of rising costs.”
Campbell tells UNLEASH that companies must “ensure managers are supported with guidance for pay conversations – managers should be empowered to have productive pay conversations, with guidance on when pay reviews should be held and how to set clear goals for role progression”.
“Without clear guidance, pay conversations can be uncomfortable and have a negative impact on employee relations,” continues Campbell. “With the right information and clear communication, both managers and their teams will be better aware of how to approach these conversations in a positive manner”.
Offer rewards and hybrid working
Similarly, employers have options besides bonuses to support their employees.
“HR functions should look at impactful cost-savings they can provide through their wider rewards and benefits offering.
“For example, can they provide savings on regular expenses – grocery shopping, school supplies, wellbeing support – to help take some of the strain off when workers need it most.”
Another option for employers who want to retain talent in the ‘Great Resignation’ and the cost of living crisis is to listen and recognize what most employees want in this new world of work culture: flexibility through hybrid options.
Parents who need to pick up their children, young people working multiple jobs are just two examples of those who especially need flexibility at work to survive this cost of living crisis. Hybrid options can relieve employee stress and increase wellbeing.
According to a BBC survey, around 80% of UK adults are worried about the rising cost of living and 66% of those who responded said that their mental health is suffering as a result.
Thus, employers have an obligation to ensure that they mitigate much of the stress that their employees face at work, as well as help employees save money by not forcing them to commute to the office.
According to Dean Sadler, CEO of TribePad, “if you promised flexible working, let people make adjustments to their working hours that allow for them to meet other obligations such as walking family to school.
“If you said hybrid working, really think about when it is essential for people to come into the office (and spend money traveling) and what can be done at home.
“Mental health in the workplace is a big topic, so ensure you have the right channels available for employees to speak about concerns. Basically, don’t get people in promising them that you care and lift the rug when it comes to it.”
Teaching employees how to save
“By building a savings culture within their workforce, HR teams will be offering solutions that actually make a real impact. This use of salary-linked savings will allow employers to provide both immediate relief from short-term cash issues, as well as long-term solutions to building savings habits,” Holliday adds.
Ultimately, the cost of living crisis is affecting millions of workers. Employees spend so much of their lives dedicated to their jobs, and they are starting to realize they have options in the ‘Great Resignation’.
So savvy employers who want them to stick around – and avoid sky high attrition rates which will ultimately be terrible for business – have a duty to support them and cushion the blow of record-high inflation.