By now we’re no strangers to the phrase “cost of living crisis”. Living in a decade where daytime tv shows offer energy bill payments as a game prize rather than tropical holidays or shiny new cars seems almost dystopian.
And it’s no surprise that the public is anxious about making ends meet with energy bills set to be capped at £2,500 as of the time of writing. Although this 25% increase isn’t as severe as the initially predicted 80%, this is still a daunting prospect for Brits whose wages are not increasing due to inflation.
This is a difficult reality to face directly following the upheaval of a pandemic. We’ve all had to adjust to the changing circumstances that social distancing brought into our lives. A large number of us have moved from offices to working from home.
Moreover, in a job market where vacancies outstrip active job seekers, the power of choice has been in candidates’ hands. This has allowed employees to prioritise companies that have adapted their culture, offering more flexibility and work-life balance.
But could the cost of living be about to change all of this?
How does cost of living affect the workplace?
A recent opinion piece published on the CNN news site is heralding the end of the era of remote working. The article firmly sits in the camp of those companies which believe that office work is necessary for productivity and collaboration.
This follows the likes of tech giant Apple, whose employees are petitioning to remain remote. Remote work is still a clear priority for workers in 2022. In fact, 50% of LinkedIn’s applications submitted for remote roles in February, despite only representing one-fifth of jobs posted.
While many Brits have benefitted from the flexibility that remote working has facilitated, the tide may be turning. With the cost of living issue at the forefront of our minds, it’s likely that the working population may undergo an attitude shift in which salary is once again prioritised over benefits packages.
Therefore, companies offering more financial support during this economic downturn will have an upper hand in the job market.
Conversely, many people in the UK have begun to feel anxiety over the security of their jobs. The following graph demonstrates that Google searches relating to company layoffs have been at their highest in recent months. Given this trend, it’s likely that, with fears of cutbacks as companies respond to the recession, employees may feel more obliged to comply with their employers asking them to return to the office.
This anxiety may be of benefit to the private sector, where there is more freedom to quickly respond to changing economic conditions. This may encourage companies to use salary as a bargaining chip.
Indeed, the Chartered Institute of Personnel and Development (CIPD) has found that 1 in 10 employers have decided to cut pay as workers refuse to return to office. However, it’s important when competing for skilled candidates to remember that a shift back towards full-time office work may be taking steps backwards.
Workforce EDI
A massive benefit of remote working is that it’s greatly beneficial to promoting diversity and equity within the workforce. McKinsey demonstrates that under-represented groups such as the LGBTQ+ community are more likely to opt for hybrid working.
Remote work has also enabled organisations to hire further afield. This extends their reach to communities that may not have found office work accessible without moving to a large city.
The cost of living crisis is also disproportionately impacting families from marginalised communities. A study by People Like Us shows that workers from ethnically diverse backgrounds are twice as likely to experience wage stagnation, yet are struggling more to cover expenses such as rent and energy bills. A forced return to the office may further the severity of this issue with commuting distance and costs also increasing.
We have previously highlighted how a diverse and inclusive workforce is key for innovation and understanding the wider community. It’s therefore important to consider whether jumping on the return to the office bandwagon may produce barriers to inclusion in your organisation.
A great reshuffle
The cost of living crisis may also produce a “great reshuffle”. As more employees are hit by rising energy, fuel and food prices, workers may begin to reassess their careers.
A staggering 40% of Gen Z and Millenial workers have had to take on second jobs to cover basic necessities. It would therefore be unsurprising if companies who show little care for the wellbeing of their staff during this difficult period find that employees will look elsewhere to continue their careers.
That isn’t to say it’s not important that there’s a match in cultural attitudes between both employee and employer. However, cutting pay for home workers will have a negative impact on wellbeing, and subsequently employer brand and retention.
Is remote working sustainable?
Although there are dangers which may be brought about by this shift in cultural attitudes, there is some debate as to whether returning to the office may help with the increasing cost of living. Home workers will use 75% more gas and 25% more electricity than office-based employees this winter.
In fact, for workers based outside of London driving to work will be cheaper than working from home. With only 1 in 10 employees receiving support from their employers to tackle the rising cost of living, it’s unsurprising that a return to the office may be welcome for much of the British workforce.
So what should your organisation do?
There’s clearly no one-size-fits-all solution to this issue. For example, it will still be cheaper for workers based in London offices to work from home than to commute. If your organisation is seeking to do more to help employees through the cost of living crisis, the key is communication.
Survey your staff and find out whether they want to return to the office over the winter. Then review your benefits offering in line with this information. Striking a balance with hybrid working where possible may help to bridge the gap between both the issues of collaborative working and the concerns of making your workplace more accessible.
It’s important to remember that while salaries will be important to employees during the cost of living crisis, wellbeing mustn’t fall by the wayside. For more insights on public sector employment, check out our blog here.