Blog Employee Experience

Is the cost of living crisis going to reduce WFH?

With the cost of living crisis set to shake the stability of households across the UK, we must ask, what does this mean for our professional lives? The past couple of years have seen a remote work revolution, but is that coming to a halt? The demand for WFH and cost of living increases seem to be pulling us in different directions.

We've known a cost of living crisis to be on the horizon for some time now. The pandemic brought the UK economy to a screeching halt. All kinds of businesses folded, including several energy providers. And, to make matters even more dire, sanctions against Russia due to the Ukraine conflict mean we have to re-appraise where our energy comes from.

As a result, it's predicted that our gas and electricity bills will go up by around £800 in October after Ofgem lifted the price cap in April. And that's far from the only way life's about to get more expensive in the UK. So, what does this mean for the push for remote work?

WFH and cost of living: What does this mean for us?

With the remote work revolution being as big as it was, there's one worry on a lot of people's minds. Are WFH and cost of living increases two diametrically opposed forces? Will the latter steamroll the former? It's a case of the demands of life versus the demands of the people.

84% of people who went remote during the pandemic planned to continue. And, in May, ONS stats showed just under a quarter of the UK workforce working partly from home. But price hikes across the board as we approach winter seem set to make that exponentially more expensive. Here's what we're looking at from the first of October:

  • Small and medium boilers will cost roughly £3.60 to £4.80 to run for an hour.
  • Working eight hours a day in some UK homes could cost over £30 on estimated heating costs alone.
  • Using a desktop PC and monitor for eight hours will cost around £1.25.
  • Boiling a kettle (the great British pastime) will cost more than 10p.

But there are other costs associated with running a home office, like heavy internet usage. And, to be clear, having a decent remote setup with good internet is essential for them to hit the ground running. But broadband costs have increased due to inflation. And speaking of inflation, it hit an eye-watering 10.1% in July. So, as you can imagine, the cost of internet went up a few notches.

So, is that it? Will everybody run back to the office to keep their bills down?

Dr Andrew White, Director of the Advanced Management and Leadership programme for Saïd Business School at Oxford University, doesn't seem to think so. He points to factors like skyrocketing petrol prices and train fares. He sees a work culture of 'staff only being asked to come into the office when it's necessary' as a way of mitigating travel costs.

So, on the one hand, there's WFH and cost of living to worry about. But, on the other, there's the cost of travel. Bonus points if there's something wrong with your car besides an empty tank. But here's Dr White's most convincing argument for why some employers may encourage working from home:

'The alternative is to give people pay rises, and to be blunt, working from home is a much cheaper solution because it won’t actually cost companies anything.'

Rising utility costs affect office budgets too. Life may be about to get more expensive for remote workers. But telecommuting is still a cost-saving measure for businesses. At least, short-term. In the long run, don't be surprised if the cost of living crisis puts pressure on employers to increase wages anyway.

What can (or should) employers do?

This isn't an easy time for anyone. If you're a HR leader reading this, don't blame yourself for feeling stuck. Helping staff overcome their WFH and cost of living conundrum can seem like an impossible task. As tempting as it is to generalise, people are dealing with all kinds of different home situations. There's no one-size-fits-all solution.

So, at the very least, don't pull the plug on your remote teams just yet. Sure, some are probably thinking about returning to the office. But, for others, working from home is still a valuable lifeline. People who live too far away to commute, or who have small children or elderly relatives. Not to mention, remote work makes some careers accessible to people with disabilities and other accessibility issues.

As always, communicate!

It's one thing to blast a company-wide email saying "Hey, don't worry, we're all in this together!"

But it's another entirely to actually talk to people on the individual level. This is where a tool for regular, two-way feedback can really come in handy. Checking in with employees on a consistent basis is the best way to make sure you're working in their interests.

Start by asking people how they feel, and what their concerns are. Be sure to use lots of open-ended, qualitative questions so they can point to specific problems. Questions in our check-in can be customised on the employee level. So, once you know what everyone's individual priorities are, you can follow up every week.

Consider the different forms of wellbeing

As things stand, it'd be shocking if the cost of living increase didn't have an adverse effect on employee wellbeing. People often disregard the concept of financial wellbeing. But, just like how lockdown shed a light on employee mental health, financial wellbeing looks set to be the defining issue of the coming months.

With the cost of heating rising as we move into winter, employees unable to heat their homes are much more likely to experience health problems. Then there's the added stress of trying to resolve a conflict between WFH and cost of living increases. This whole thing is a mental health nightmare. And, with strain on mental wellbeing comes increased risk of employee burnout.

Provide access to knowledge resources

Sometimes, all you can do for a person is to help them make the best of a bad situation. As a HR leader, you're in a good place to do that for employees in your organisation.

There may be no getting around skyrocketing utilities costs entirely. But you can put together some lists and links to help your people shop around for the best deals. If you can point them to the best or cheapest providers, people are bound to appreciate it.

You could even set up a seminar or training course for financial management. Not only does this help people make the best decisions going forward, it also provides a form of up-skilling.

Push for better compensation

As a HR leader, you don't exactly have a deciding vote here. But you can at least make the case for better compensation. Look, we know it's not what the CEO will want to hear. We know it's the thing that makes executive boards hiss like vampires in the sun.

But, with such massive cost of living increases on the way, people will inevitably need more money. And that's especially true for already low salaries. Not to mention remote workers, who are already getting threatened with pay-cuts.

How your decisions could affect engagement and performance

Whatever you decide to do, you need to consider the knock-on effects. For example, cutting your remote teams and forcing people back to the office.

Given how vastly popular remote work is among its participants, it's fair to say most don't want to give it up. Trying to force people back into the office will lead to disengagement and higher turnover. The same can be said for pushing office workers into remote roles to scale back on office or transport costs.

This is why, when you're looking at your options, your people deserve a seat at the table. If you don't want to drive people away, they need to have a say in what happens. That's why you need to check in regularly and gauge employee sentiment.

But what about if you do nothing? Business as usual, fingers in ears, pretending it's not happening.

That's not likely to go over well either. People are understandably freaked out by what's happening right now. People are looking to their employers (and, by extension, HR) to be a guiding light. So, if you're not supporting staff, if you aren't communicating and you're not increasing compensation, why should they stick around?

The next few months are going to be tense, as everyone adjusts to the new rates of inflation. And, weird as it is to say so soon after the pandemic, there's never been a more important time to look after your employees.