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The cost of living crisis and its impact on HR

The cost of living crisis means we are all paying a lot more for energy and food, as well as things like mortgages, rent and fuel. Inflation is running at a double digit pace, the highest in 40 years and far outpacing wage growth. Naturally, this will have a knock on effect on your workforce. In this article, we set out some issues which you may face as a result of this crisis. 

A return to the office?

As the price of heating has dramatically risen this winter, employers may find an increase in the number of staff who up until now have enjoyed working from home and now want to come back to the office. It will be expensive to heat a home during the daytime and if you don’t need to, it is one way you can save some money. If you haven’t reduced your desk space and can still accommodate everyone in the office, as you did in pre pandemic times, this shouldn’t cause you any problems.  On the other hand, if you have moved to smaller offices or otherwise cannot accommodate everyone back in the office, how should you handle this?  Your starting point will be to consider the arrangement you have with the staff member. Hopefully, this will be in writing. If you agreed to working from home as a permanent change to their terms and conditions, you can decline a request for a return to the office. If you didn’t do this, or if you want to accommodate a request, you should explore whether you can devise a rota which is applied fairly and consistently. Alternatively, you could offer a pay rise to cover the increased costs of heating or a one off payment for the winter months. As always, the solution should be explored and discussed with the affected staff.

Pay rises

These are needed more than ever. If you can afford to give pay rises or even a one off cost of living bonus you should consider doing so – not only will it help your staff, it will no doubt earn you loyalty. 

A small word of caution– whilst most employees will no doubt welcome a pay rise or a one off bonus, for some lower wage employees in receipt of Universal Credits or Tax Credits these payments could interfere with their benefit payments and see them reduced. If there is any fear this could happen, you should have an open conversation with your member of staff.

An increase in domestic abuse

Refuge, the country’s largest single provider of specialist domestic abuse services, say that they have seen an 87% increase in referrals for support in complex domestic abuse cases and that this is directly linked to the cost of living crisis.

Domestic abuse is complex and can take many forms, it may involve a single incident or a course of conduct. Examples of domestic abuse include psychological, emotional or economic abuse, physical or sexual abuse, controlling or coercive behaviour and violence of threats of violence. It may include exploitation, manipulation, humiliation, harassment, isolation or intimidation.

It goes without saying that victims of domestic abuse can be part of your workforce. Abuse that an individual experiences at home is likely to have a direct impact on every aspect of their life, including their work life. Economic abuse is prevalent and can include the abuser attempting to control or sabotage the victim’s work. This can include controlling their working hours or attendance at work related activities, making the victim late for work or insisting on driving and collecting them from work, demanding that earnings are paid into a specific bank account, isolating their victim from colleagues and destroying their confidence or causing an injury to them or making them so unwell they are unable to attend work.

You may want to consider introducing a policy and offer training to your managers to help them recognise domestic abuse as an issue and to raise awareness of domestic abuse and its impact on work, including how you can provide a safe place of work for those experiencing domestic abuse. You should encourage open conversations and look out for the signs which can include persistent lateness of absenteeism, a decline in productivity or quality of work, changes in their appearance, withdrawal from work related social events, regular interruptions to their work (for example, having to take telephone calls at all times).

More time off for dependents 

Having a safe, warm and secure home with enough food and opportunities to play, have fun and learn are all necessary for a happy childhood and healthy mental wellbeing. Before the cost of living crisis 1 out of 3 children were living in poverty. This is no doubt rising and children and young people are facing a very challenging time. Young people in particular are facing increased incidents of self harm, depression, anxiety and other mental health issues are on the rise.

According to the Childhood Trust, in a survey they conducted in 2022,  a third of the 608 parents questioned said that their under 18s had raised concerns about the crisis. Of those 208 parents, 30% said their children felt stressed, 21% said their children smiled less and 17% said that their children had started self harming.

Naturally, the parents or other carers of these children and young people will also feel the effect. They may need more time of work to look after their child or to attend to their increasing needs.

By law, employees have the statutory right to take unpaid time off work in order to deal with emergencies involving their dependents.  This applies to all employees, irrespective of their length of service or whether they are full time or part time.  However, it is limited to very specific incidents including (i) to provide assistance if a dependent falls ill, gives birth, is injured or assaulted, (ii) to make arrangements to afford the provision of care for a dependant who is ill or injured, (iii) in consequence of the death of a dependent, (iv) to deal with the unexpected disruption, termination or breakdown of arrangements for the care of a dependent and (v) to deal with an unexpected event which involves the employee’s child during school.

You should always allow your employees to have time off for these emergencies and you may want to consider paying them as usual for this time away from the office. If the emergency is connected to the cost of living crisis and financial worries, not paying them for this time will only add to the problems they are facing.

The second job

The cost of living crisis has led to more employees taking on second or additional jobs due to financial concerns. During employment, the implied duty of good faith and fidelity restricts an employee’s ability to work in competition with their employer, however, broadly speaking it is not unlawful for an employee to take on a second job if they are not working in competition with their employer or causing serious harm to their employers legitimate business interests. However, some contracts of employment do limit an employee’s ability to work elsewhere by including an express term to prevent them from doing so. This will not always be appropriate particularly for the more junior or part time members of staff when a second job may be less likely to cause harm and where regulatory codes for example may not be relevant. In those cases you may want to introduce a requirement for an employee to seek written consent to take up the second job rather than imposing a blanket prohibition.

If you would like to speak to us about any of these issues or any other employment related concerns you may have please do contact one of the Directors, Rachel O’Connell on or Helen Phillips on Alternatively, Please contact us or call us on 01483 303636  . We would be very happy to have an initial, no obligation, chat with you over the phone.