The cost-of-living crisis sees business leaders facing new challenges managing employees who are increasingly struggling to make ends meet.
How employers handle this crisis will affect ongoing hiring and retention and determine their potential for sustainable future growth.
With the cost-of-living crisis looming over the heads of every Brit in the UK, with lower-income families facing the worst period in our lifetimes, what can businesses do to support their employees?
The perfect storm of rising prices and rising taxation
Living costs are exponentially rising, from heating homes to commuting to work.
Whilst the issue itself is somewhat out of the hands of business owners and leaders, it is important to acknowledge effect this is having on their workforce.
As companies face increasing transportation costs, higher employer national insurance contributions, and rapidly growing operating costs due to increased energy prices, there are also emotional and physical consequences for their workers.
What can businesses do to support their employees?
Sophie Wade, author of the upcoming publication Empathy Works, believes that now, more than ever, empathy is the crucial skill, mindset, and corporate value that enables business leaders to understand employees’ situations and what they are going through, adjust their management style, and provide comprehensive support:
“The pandemic catalysed significant changes in workplace environments. As leaders – whether at the senior executive level or as a team manager – we had to manage our businesses with a more human-centric orientation. Our corporate cultures have been transitioning from transactional to experiential, elevating trust and empathy as key values, as we recognize the challenges faced by the people we employ or work alongside and their greater emotional needs.
“While we are finally emerging from the COVID19 crisis, the new cost of living crisis is having a significant impact on so many aspects of our lives. We are having to reconsider or limit how we light and heat our homes, commute to work and put food on the table with smaller pay checks as our contributions rise.”
Top 5 tips for leading through crisis
- Culture: Nurture a corporate culture that is welcoming, inclusive, and offers support to your direct reports and colleagues creating a safe space for them to reach out for help or just someone to listen.
- Empathy: Listen actively and show concern for whatever employees are comfortable sharing about their situations to show that you care how rising living costs are affecting them.
- Flexibility: Offer workplace policy options which individuals can use to improve their situations if they need to reduce commuting costs or household expenses if they have been working from home.
- Example: Ensure you demonstrate the benefit of new programs such as a “Bike-to-Work Scheme” that lowers commuting costs, leading by example to embrace these initiatives.
- Benefits: What benefits do you provide that are helping employees handle their current circumstances? Financial management lunchtime talks and courses can be extremely useful and directly impact employees’ financial well-being.
Finding viable solutions: a human-centric approach
With the ‘perfect storm’ of rising prices and reduced income, many employees are challenged to find viable solutions with increasing costs both working from home and commuting to the office. However, we have just suffered the extraordinary difficulties of the pandemic and brought empathy into the workplace to improve the atmosphere and outcomes, as Sophie explains:
“To manage this new crisis, we can learn from the last two years. As managers, we embraced empathy and practiced it with our teams to be more attuned to what they were going through. Now again, taking the same human-centric perspective, we need to listen to employees, understand their situations and needs, and nurture trust-based cultures that create a sense of belonging and community that can support them.
“We can recognise each person’s different points of view and circumstances as well as understand that some may be embarrassed to admit their financial and emotional struggles. The empathy that we elevated in our cultures and integrated into management practices during the pandemic should now be pervasive, ongoing, and consistent.
“Every employee should feel there is someone they feel comfortable to turn to, voice their concerns, and seek out the help they need.”
Taking a “human- centric, thoughtful, and empathetic approach, we can figure out how to improve workplace culture, benefits, and retention, and ensure the sustainable growth potential for our businesses,” adds Sophie.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
