Supporting employees is a win-win for businesses facing economic challenges
So much of the media coverage on soaring energy prices and inflation is focused on consumers – but businesses are facing a crisis too.
Britain’s private sector has emerged battered and bruised from the pandemic only to face what is arguably an even bigger threat. Businesses such as restaurants are reporting projected energy bills quadrupling, threatening their survival.
New Prime Minister Liz Truss’ new energy support package for businesses is welcome news for businesses, but there is still uncertainty about how effective the six-month programme will be, with many employers still worried about the winter.
The cost of living conundrum
Of course energy support packages – whether for individuals or businesses – do not address the whole cost of living problem. In August inflation reached double figures for the first time in decades. For consumers the prices of essential goods, such as food, are soaring.
At the same time businesses are grappling with rising input costs presenting them with a dilemma – how long do they wait before passing on those extra costs to their customers, who are themselves struggling? It’s a vicious circle.
On the day Liz Truss entered Downing Street Tony Danker, director-general of employers’ association the CBI, sent her an unequivocal message. He said: “Most immediately, support for struggling households and firms in jeopardy is top of the in-tray.
“This may not be the pandemic, but the exceptional circumstances we now face mean Government must play a central role in supporting our economy.
“And if we’re serious about getting the UK growing again, ensuring any slowdown is short and shallow, we need a serious plan for growth. It needs to be bold, unconventional and rooted in the very real opportunities that still exist for the UK to thrive.”
Through the summer the CBI launched a new campaign - Managing the cost of doing business. This was two-pronged – it asked Government to introduce measures to support employers and offered its own advice for businesses looking to manage their costs.
These included tips on managing costs in the workforce, rising energy bills and boosting operational resilience. Click here to find out more details.
Retain and reward
Of course, cost-saving measures present employers with another dilemma. They know they have to reduce costs but they also understand their employees are hurting too. There is a need to offer support. And it makes sense. As they emerge from the crisis they will need to retain their best people.
Even before inflation started to rise, companies across the UK were struggling with labour market shortages. These have been particularly acute in sectors such as hospitality. Closed doors during lockdowns led to many workers seeking opportunities in other sectors.
In August the Chartered Institute of Personnel and Development (CIPD), the professional body for HR and people development, said the UK’s “hiring boom” was continuing. It reported that pay awards, driven by the “incredibly tight” labour market and rising inflation, had hit a record high in the private sector.
“Employers are pulling out all the stops to attract, and crucially, retain staff,” the CIPD said. However, it warned that “pay increases cannot be sustained over the long-term”, adding: “Employers should look at other ways of supporting financial wellbeing in the cost-of-living crisis, such as enhancing their overall benefits package.”
Recruitment is unavoidable. But every employer knows that when you bring a new person into your business, you never quite know what you are going to get. They may have the skills but are they a good fit for your team? The cost of bringing in a new hire is also a serious consideration.
Companies may want to consider the possibility that the answer to their recruitment problems may be right under their noses. Training and upskilling members of your existing team offers multiple benefits. New skills mean new opportunities and that makes people feel valued. It’s an ideal retention strategy.
Training and upskilling also needn’t cost the earth – upskilling existing team members costs on average one-third less than recruiting from outside your business.
In addition, all employers in the UK can access a minimum of 95% Government funding for apprenticeships.
We think of apprenticeships as being for young people. However, there is no upper age limit on apprenticeships. They can be used to upskill your existing workforce. Apprenticeships are delivered from Level 2 (GCSE equivalent) through to Level 7 (Masters’ Degree equivalent).
If you do decide to bring in someone new as an apprentice, you can mould them from day one to fit your business needs and its culture. Hiring people ‘off-the-peg’ with previous experience can be more time-consuming and expensive.
Employers who pay the Apprenticeship Levy (those with a wage bill in excess of £3m per year), can reinvest this funding back into their business in the form of apprenticeship training. They can also transfer up to 25% of their levy to other employers.
Make an impact with small actions
Even if people are in a reasonably well-paid job with good prospects, many are still seeing their anxiety levels rise due to the cost of living crisis. In an ideal world we would hang up our troubles with our coats when we walk into work each morning. But life isn’t quite that simple. If your workplace is stressful, that just adds to the burden.
According to the Health and Safety Executive work-related stress, depression or anxiety represented 50% of all work-related illness in 2020-21. That can have a significant impact on productivity. Research published by YouGov in July revealed 52% of UK workers saying they feel “very” or “fairly” stressed at work.
An employer can’t magic away people’s real-life problems but there are practical things they can do to just make things that little bit better. Simple gestures such as free tea and coffee at work, or fresh fruit, can go a long way.
For businesses that want to go a little further, Love2shop can work with HR departments to create a tailor-made rewards programme for their employees. It has already forged successful employee engagement partnerships with countless firms across the country.
One product that is increasingly popular with HR departments is the Everyday Benefits Card* delivered via its popular Love2shop brand. Love2shop is one of the UK’s best-known gift card and voucher providers.
Around 200 retailers and well-known brands are partnered with Love2shop. They include Marks & Spencer, Wilko, Iceland, Halfords, Matalan, Argos, Costa, Harvester, Tui, Jet2Holidays and many, many more.
Once an employer is signed up, the Everyday Benefits Card can be delivered to the employee’s workplace or even their home. The employee goes online, completes a simple registration and then load funds onto the card.
Funds they load onto the Everyday Benefits Card are immediately discounted, meaning they can enjoy great savings on essentials such as food, luxuries like a meal out or even a holiday.
It can also be used to make a healthy difference to peoples’ lives. With Halfords for example, people could get a great deal on a bicycle under the Cycle to Work scheme.
We live in difficult and uncertain times but, with a little bit of creativity, employers can make a real difference to the lives of their hard-working teams and retain all the vital skills and knowledge they need to remain strong when the economy begins to recover. It is not only the right thing to do but makes perfect business sense.
*The Everyday Benefits Card is a Flexecash product.
Flexecash is the pre-paid card platform which issues the Love2shop Cards. This facility is provided by Park Card Services Ltd who are Authorised and Regulated by the Financial Conduct Authority to issue electronic money. (FRN: 900016)