Working from home during the pandemic resulted in a number of unexpected benefits for employees. Many found that they were able to build a better work/life balance, for example, spending less time travelling, more time with family and enjoying hobbies.
One of the biggest benefits, however, has undoubtedly been the cost savings. According to the Office for National Statistics, around half of all homeworkers have noticed that they’ve been spending less money since starting to work remotely.
And it’s not surprising. With no commute, the ability to make a quick sandwich from the fridge at lunchtime, and coffees from the kettle rather than the cafe, day-to-day expenses will naturally be lower. The problem now is that many organisations are calling employees back to the office. And the question is: can they really afford it?
Rising Costs & Changing Perspectives
It may seem like a strange question to ask. After all, employees could afford all this before the pandemic. If they’re on the same salary, why can’t they afford it now?
There are two potential answers to the question. The first is that the cost of living is rising. Prior to COVID-19, the average price of petrol according to the RAC was 125.78p. In 2022, that’s shot up to 166.66p. It’s the same when it comes to train fares. It’s expected that the cost of a season ticket could rise by 12.3% in 2023, which would add £620 per year to the price of an annual ticket from Reading to London.
With the cost of food, heating and other everyday essentials also rising, we really are reaching a point where employees quite literally cannot afford to go to the office.
The second reason is that employee perspectives have evolved. Petrol, train tickets, takeaway coffees, pre-made sandwiches… all these things have been the norm for as long as many of us can remember. They’ve been expenses that have just naturally been absorbed into the cost of working. But the pandemic shifted things.
Employees began to realise that, actually, these expenses aren’t normal; they’re not necessary in order to carry out work tasks with efficiency and accuracy. These are nothing more than extras that don’t have any tangible impact on work outcomes. Many simply aren’t willing to pay out for anything that they deem unnecessary.
So, what does all this mean for businesses?
Addressing the Cost of Working
As a business, you can either choose to address the rising cost of going to work, or not. And it’s not surprising that many aren’t all too keen to jump in. Organisations themselves are working through a challenging period of recovery right now, and increasing salaries isn’t always a viable option.
The issue is that some companies *are* increasing salaries in response to this growing crisis. Employees and candidates both know what’s on offer, which means that those who aren’t taking any action could find that it’s getting trickier and trickier to attract and retain top talent.
Here are a few options to consider which could help you to recognise the challenges workers are facing today without necessarily having to increase salaries:
- Introduce flexible or hybrid working policies. Perhaps look into enabling staff to work non-standard hours so that they can travel on off-peak public transport or enabling employees to continue working from home part time. Or even encourage car sharing to reduce fuel and parking costs.
- Think about introducing salary sacrifice schemes which allow employees to exchange a portion of their salary for a non-monetary benefit such as childcare or bicycles. This can help to reduce the tax an employee pays.
- Launch free breakfasts. While this is an expense, it can cost a lot less to provide cereals or toast to an entire office than to provide everyone with a meaningful salary increase. And it can make a huge difference to workers.
At a time when businesses are already struggling with staff acquisition and retention, recognising, and working to reduce the cost of returning to the office can be a differentiator that sets your organisation apart from those that are not taking action.
