Personally I'm actually more worried about potential impact on the small company I work for, than the direct impact on myself.

For individuals, there will still be a cap on energy prices, but there is no such cap for small businesses. Whereas for individual households the energy price may increase by 80%, for businesses it may increase by several hundred percent or even more.

For myself, I have some savings, and I don't have children, so as long as I still have a steady monthly income, even though it's not much, I can absorb several thousand pounds increase in living costs per year. It just means I won't be able to save any money and would probably have to use up part of my savings as well.

But if the small company I work for is hit so hard that it collapses so that I actually end up losing my job and my regular income, then that would be a much bigger problem for me to be honest.

Following a 5.5% increase across the board in April, we are currently considering a one-off payment in September to all employees who are not in the higher tax band. Trying to use the funds we think we’ll have available to give the maximum impact to the employees who need it most.

We are also creating a Financial Wellbeing policy for the first time, to try and signpost employees to the benefits we already offer that can help them manage their costs, and also to external agencies/charities who might be able to help with money issues.

However. We are waiting to see what magic accounting tricks the new Prime Minister comes up with before making any decisions. As Chen-Yang says, the impact of price increases has been substantial to our small company, which in turn limits additional payments we are able to make to employees. The rate we pay for gas has gone up 600% since we had to renew our fixed contract, for example.

As with all businesses, the only way we could significantly increase staff pay would be to put the cost of services up - impacting customers, driving up inflation, and moving the problem on. It's very hard to identify the right support for our staff in the short and longer term, but it doesn't mean we aren't worried about how our teams will adjust.

Hi Steve

I saw your post and thought I would reach out to hopefully get yours and other peoples thoughts on an idea I have had to help our employees with the cost of living crisis. Our business is not in the best place financially so we are unable to give one-off cost of living payments, or raise the pay rates right now. Our next pay review is in January and to be honest I don't think the proposals we are thinking about for our budget are still going to cut it with inflation & bills souring as they are. We have had a "Financial Wellbeing" week recently where we made a lot of information accessible to employees on how to budget, where to find discounts, counsellors if struggling with money worries etc. But I really want to do more and have been thinking about what else we can do, bearing in mind the business has no money to play with currently.

One idea I had was to arrange our own food bank and allowing employees to take a "box" of food home. I'm still trying to work out the logistics of this, and whether I need to set some boundaries (if you can think of any then please let me know). I have looked online to see if other employers have done something similar, but not found anything. My thought process so far is to open it up to employees for a couple of weeks to make donations and then once we see how much we have, sorting all this into boxes and allowing employees to take a box home. We probably wouldn't be able to keep it up long term as there's only two of us in the office, so was thinking of doing it for a month. I know its not much, but its something. Any thoughts?

In reply to Nina Waters:

As with all businesses, the only way we could significantly increase staff pay would be to put the cost of services up

Although this is certainly true for *some* businesses, it's far from true for *all* businesses. It would be nice to see publicly-traded companies put a moratorium on dividend payments and push their profits back into employee pay and bonuses.

Companies could also move further into embracing remote working if household energy bills are going to be better value than corporate energy bills. Companies could pay employees a sum to help with household energy bills, close their power-hungry offices and save money overall, benefiting from the energy price cap (plus gleaning all of the other benefits of 100% remote working).

In reply to Robey:

Not sure that household energy bills are going to be any better value than corporate ones. More likely that people will return to offices so that they save on heating and lighting their own home throughout the day.

In reply to Annabel:

Yes we are going to allow everyone to decide what is the better option for them out of either decreased fuel costs from home working or decreased energy bills for working in the office. I think everyone knows their own situation best so I want to be able to offer staff that decision.

As mentioned in the OP, there is a cap on household energy prices, but not on commercial energy prices, so the cost of energy to businesses will be higher than to households. Ergo, letting people return to the office to save it domestic energy costs will result in higher costs for businesses. Contrariwise, using the money you *would have spent* on commercial energy and using it to subsidize domestic energy use for employees would help both sides save money.

We recently ran 2 Financial Wellbeing workshops with a really good uptake across the whole business. I've followed these up with publishing a Financial Wellbeing policy, which signposts employees to internal and external support. It also sets out the company's view that this topic is something worth talking about, whether with line managers, colleagues, HR, our EAP or our MHFA. And we are running 1-1s this week for employees to speak with an independent financial adviser on any topics of their choice, e.g. mortgages, savings, debt, etc.
All of this is intended to show employees that the business is aware of current and anticipated economic problems and acknowledges the role it plays in helping employees deal with it.
Now my plan is to get feedback from line managers, to share with my Board, to inform our annual pay review, due in January, and any other action we think necessary in the interim.
However, as others have said, I think we shall need to hold off making or communicating any decisions until we know our government's plans for tackling rising energy prices and inflation. Hopefully this will be very soon.

In reply to Robey:

Not that there is a solution that will fit all but this wouldn't work in places where staff have no choice but to come into the office i.e warehouse operatives.

In reply to Maya:

We are an SME of 60 staff. We considered limiting our proposed one-off payment to those on lower pay only but we know that some of our staff who are higher rate tax payers are also facing significant financial pressures so we are proposing to pay this to all staff except for directors. We feel that the payment not only represents some financial assistance but also demonstrates support and understanding to all of our employees.

In reply to Robey:

I absolutely second that. Covid has thought that we can be productive working from home. This is a good strategy and can help in hybrid working (depending on the business) as its save employee cost to travel and employer's energy bills/ cost of running facilities.

Hi Steve, I am part of Middle East and we have had one-time for certain countries which went through continued challenges on Cost of living including cap on salary withdrawal, huge currency depritication/fluctuation (Almost 30% in a single day). These are common in emerging economies and Global companies can't afford to keep paying one-time payouts. Only place our company has managed to do one-time is in Lebanon and Sri Lanka. Depending on where we have office, the problems are different in certain Europe countries and it needs to be seen how this winter affects as there is also expected recession. Its better to have a job in these difficult times than the companies having much more financial pressures which might lead to job cuts or risking business depending on the industry.

An opportunity to harness the "power of the collective initiatives" may help. So, what I mean by this is pulling together by increasing purchasing power to buy household goods; running a works kitchen; recycle scheme for anthing. Just some light bulb thinking folks. Together we can pull through this crisis.

Just to flag a few CIPD blogs that could be useful. One looks at the steps that HR teams could take to support their teams during the cost-of-living crisis, one that looks at the case for paying the Living Wage, and one looking at how we can better engage people with their workplace pensions. Also, next month's CIPD Labour Market Outlook will have a section on how employers have supported their people during these inflationary times.