Cost of living impacts on employees and employers

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?

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).

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.

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.

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.