As we find ourselves in the midst of a cost of living crisis, it’s imperative that businesses seek to adapt their operations in order to continue to perform in light of the downturn and to actively foster a happy and productive network of staff.
This may be easier said than done, however, with more employees and consumers alike preparing to cut back on their expenditure as strong financial headwinds appear set to bring a recession to the United Kingdom.
(Image: Office for National Statistics)
As an Office for National Statistics survey shows, the cost of living crisis is forcing 57% of UK adults to cut back on non-essential expenditure, while more than one-third of respondents opted to shop around more for deals, spent less on food shopping and essentials, and decided against non-essential travel.
For many businesses, such readings can be extremely bad news–particularly for brick and mortar stores. If consumers aren’t willing to travel and spend money on non-essential goods, how can retailers seek to invest more in providing better care for their employees?
Fortunately, there are a number of cost-effective measures that can be taken to help businesses to better manage staff during the cost of living crisis while also looking after their welfare.
While matters of proportionate pay and salary revisions to take into account for inflation should be at the top of the agenda, there are also a number of adjustments and adaptations that can also pave the way for a happy and productive workforce:
1. Offer More Flexibility
Flexible working patterns are not only highly rated and sought after by staff, it can also mitigate a number of expenses for employers and employees alike.
While businesses can benefit from saving on their energy bills, equipment hires, and downsizing or even eliminating their office space, employees can save a small fortune on travel expenses, food, and childcare.
Alternatively, allowing the flexibility to travel to work in off-peak times can also help to generate better savings during the crisis.
2. Focus on Preventing Employee Turnover
Employee turnover is one of the most costly and preventable hurdles for businesses to navigate in a cost of living crisis.
Retaining your best talent is not only important, but it saves costs on the hiring process for new recruits.
In 2020, the UK Department for Work and Pensions created the In-Work Progression Commission, which helps employers to develop the skills of their employees in a bid to tackle in-work poverty. This commission champions progression paths and access to effective training programs and managerial support.
Furthermore, automated VR onboarding programs can help to cover the costs of training new hires each time they’re added to your workforce. This can help to better prepare your employees for future progression and promote better competencies that can prevent future employee turnover.
3. 4-Day Working Weeks Could be Mutually Beneficial
Depending on business performance, it may be worth trialling a four day working week during the cost of living crisis. This can be a great way of giving remote employees a break from having to use energy to work.
For office-based employees, four day working weeks can also help to reduce commuting costs and other work-related expenses.
Should your business operations slow down due to a lack of consumer spending power, the four-day working week can also help you to remain productive while saving money associated with running an office for an extra day each week.
4. Honesty Should Always be Your Policy
It’s always best to prevent your staff from being kept in the dark about company challenges. This means that you should always be open and honest with staff when it comes to forecasting performance and cash flow.
While some managers prefer to avoid fear-mongering in forecasting a downturn, no news is certainly not regarded as good news by employees who may draw the wrong conclusions from whispers around the office.
Share the challenges you’re facing with your staff, and lay bare your strategies to overcome them. This can be a great approach for gaining constructive feedback from individuals who know the company well and who can advise more refined approaches and fresh insight.
5. Use Your Employees as a Control Group in Strategising Cut-Backs on Expenses
The sad reality of a cost-of-living crisis is that things will likely have to change. Making cuts on non-essential business expenses may be necessary, but your employees are likely to be happier with the measures and will feel more valued by the company if they’re consulted before making key decisions.
Are your employees using all the available coffee pods in the office? Are they willing to accept a cheaper brand of soft drinks for the fridge? Would they be interested in using low-cost video conferencing software?
By explaining current forecasts with your employees and then running cost-cutting suggestions by them, they can become actively involved in understanding and aiding a company-wide effort to minimise costs.
This can be a far more effective approach than to simply make the cuts before consulting them, which could lead staff to feeling less-valued and more concerned by the severity of the economic challenges the business may be facing.
While challenging times are ahead, you should see the cost of living crisis as an opportunity to prove that your business model is bulletproof. Even if you’re forced to scale back plans for growth, by successfully navigating the economic downturn, your business model will be better equipped to thrive once financial headwinds clear.
At the core of your strategy should always be employees and their welfare. By taking proactive measures to ensure your staff can navigate the crisis alongside your business, you’re set to have a strong team by your side for a brighter future.