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Lucie Mitchell looks at how employers can help employees struggling with surging inflation, whether their circumstances mean homeworking or office working is cheaper.
The last few weeks has seen a number of articles predicting a rush back to the office because of surging heating costs, but it’s often not that simple and people’s decisions will depend on many individual factors. While energy costs are rising, so too are commuting costs – not to mention the fact that some businesses may no longer be equipped to welcome back all employees to the office, having turned to hybrid working or gone completely virtual in recent times.
“All employees will likely feel the pinch this winter, so will be exploring all cost-saving measures, including working from the office to avoid high energy bills,” remarks Kate Palmer, HR advice and consultancy director at Peninsula.
While a recent Glassdoor survey found 58% say flexible working has helped them to manage the increased cost of living, analysis by Uswitch found remote workers typically use 75% more gas and 25% more electricity per day in winter, compared to those who work full time from the office.
“The majority of working from home costs come from using the heating,” comments Victoria McLean, CEO & founder of career consultancy City CV. “So, from an energy point of view, employees may find being in the office cheaper. And while they’re there, depending on the employer and their culture, they also might not be paying for things like coffee, tea and snacks their employer may provide.”
A recent survey of 900 hybrid workers by InstantPrint found that 85% agreed working from the office will be more appealing in the coming months, with almost half planning to make the commute to the office to help with energy bills.
However, the report also revealed that 15% admitted their office was unable to provide capacity for the full team, which means some employees may not even have a suitable office to go back to if their employer has been forced to cut overheads.
The Government announced yesterday how businesses will benefit from a six-month support package on their energy costs, with vulnerable industries having the possibility of further support. This compares to the two years of support being offered to households. Uncertainty about future support could cause more worry over energy bills for employers in future and could lead to an increase in even more businesses moving to a hybrid or home working model in an attempt to reduce office costs.
“A support package for businesses will help, but the fear of expensive and unaffordable bills is real so there may be a perception that we’re just kicking the can down the road,” comments Tracey Hudson, executive director at The HR Dept. “Employers are back to talking about the feasibility of llosing office costs altogether. Since lockdown was lifted, and we’ve moved to a more flexible hybrid working arrangement, it may be that employers need to enforce a more formal arrangement to limit the number of staff coming into the office on any one day, so that it’s possible to reduce overall office costs, which would give companies more control of their overheads.”
Yet this doesn’t mean employers should shy away from providing support to staff amid the continuing cost-of-living crisis and rising bills. So what help is available for remote workers and exactly what should employers be doing?
Home workers can currently claim a small amount of tax relief from the government, although this pales in comparison to the eye-watering rises in energy bills. “Your employer can either pay you up to £6 per week to cover additional costs from working from home, or this can be deducted from your taxable income,” explains McLean.
However, employers can explore other avenues of support too if they have employees who are struggling.
“Employers should have initiatives in place to support employees’ financial wellbeing and may wish to allow greater flexibility with office working to promote this,” advises Palmer.
“For some homeworkers, returning to the office may be a useful way to save on household bills. Where this isn’t possible, employers might want to consider providing a homeworking allowance, to ease the financial pressures associated with working from home, especially through the winter months. For other on-site workers, commuting expenses may be more of an issue. In these circumstances, providing travel ticket loans, free parking or hybrid working arrangements can help reduce their overall outgoings.”
The InstantPrint report also revealed that one in four workers felt their employer wasn’t doing enough to support them during the cost-of-living crisis, and 73% believed that employers should be doing more to support their staff with rising energy bills. Pay rises and bonuses topped the list of ways employers could help.
Offering pay rises is an obvious way that employers can provide financial support, but this isn’t always feasible for every business.
“Employers cannot be held responsible for the increase of living costs,” remarks Hudson. “Having said that, it’s important to consider this when calculating salary increases for employees. Some employers are nervous about salary increases because we don’t know what the future holds, so employers are being more cautious about spending; offering bonuses as one-off payments and a goodwill gesture, rather than permanent salary increases, is another option.”
Of course, the cost-of-living crisis is affecting employees and businesses alike, and many employers are simply not in a position to offer any financial assistance – but there are other ways to provide support.
Signposting employees to other services can be useful too, comments Hudson. “You can point employees to the Energy Saving Trust, which has some great tips for reducing energy costs at home, or the Money Advice Service.”
Palmer adds: “Other ways that employers can provide support include offering an employee assistance programme (EAP), introducing rewards and benefits programmes and providing financial literacy and education sessions.”