The cost of living crisis affects employee retention, engagement, and productivity, as well as talent attraction and the company's brand. CFO's addressing this crisis demonstrates a commitment to social responsibility and ethical business practices, enhancing the organisation's reputation and contributing to its long-term success
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Pernicious price rises and the interest rate hikes designed to temper them are undermining the ability of Britain’s workforce to focus on the task at hand.
Polling commissioned by the employment advice body Acas suggests that three out of five workers are feeling stressed as a result of the cost-of-living crisis, which is characterised by ever higher food prices and elevated borrowing costs.
Perhaps unsurprisingly, a third of UK workers are finding it hard to focus at work due to related concerns, putting small- and medium-sized businesses under pressure to keep staff engaged.
But these businesses, too, are under the cosh, as increased energy bills and sterling weakness linked to ongoing Brexit impacts make imported goods and services increasingly expensive.
Almost a third of companies reported a drop in turnover at the start of the year, spurring coffee point conversations around the possibility of redundancies – creating a mental health maelstrom that requires urgent attention.
Improving employee experience is thus vital to ensure staff remain willing to invest their time and energy at work, while also reassuring new recruits and experienced staff that they have made the right choice of workplace.
Astute corporate leaders are considering measures to ease the burden, such as targeted pay rises to assist lower-paid staff feeling the pinch more than most, one-off, morale-boosting bonus payments, free or subsidised meals, discounts or benefit schemes at local businesses, or reimbursing home office energy costs.
Another consequence of the crisis is that companies are having more frank and honest conversations about costs; what the business is doing to keep them down, and how investment decisions will ultimately contribute to growing profits.
Transparency is key: company leaders are eager to be seen to ‘muck in’ with frontline staff, with many adopting a ‘one size fits all’ approach to policies on travel and expenses.
After all, spotting senior managers flying business class on Instagram while colleagues cut back on superfluous expenses tends to erode the bonds of trust that are crucial to maintaining company morale.
Expenses are another hot topic, with employees often unsure as to what they can and cannot claim, especially when both they and their employer are struggling to make ends meet.
New research from SAP Concur, which provides organisations with expense, invoice and travel solutions, shows that 56% of employees worry that delayed reimbursements will impact their personal finances. More than half are also concerned about losing out financially due to unclaimed expenses.
In this respect, software tools that allow human resources teams to share evidence that all staff are marching to the same tune when it comes to taking trips and lodging claims can be invaluable.
They also allow CFOs to show how flattening hierarchies and introducing stricter policies in these areas can cut costs, allowing savings to be reinvested in initiatives that more directly contribute to improving how staff feel about the work they do.
With research indicating that one in four UK households regularly run out of money for essentials, paying expenses claims on time lifts employee confidence, and negates potentially ruinous conversations around reimbursement timelines.
Indeed, employees value solutions that lower expenses processing times, and which allow them to log claims on the move via mobile devices, as they provide peace of mind when it comes to juggling stretched household finances.
“The key points are visibility and flexibility,” says Ryan Demaray, Global Head of Sales at SAP Concur. “Back office teams want visibility on claims activity so they can make sure their business is not overspending, and the flexibility to take on and pay for more processing capacity as required so they can make sure their business is not overspending, and the flexibility to take on and pay for more processing capacity as required.”
Automated expense management solutions like Concur Expense can assist the 46% of employees who say they choose not to expense smaller amounts due to time-consuming processes, and the similar proportion who fear that complicated processes affect their productivity.
From the perspective of finance leaders, digital tools allow managers to open fruitful conversations around training and other potential assistance with the almost one-third of workers who reclaim expenses too late as a result of new hybrid working arrangements. Around 60% of decision-makers already have solutions in place that allow them to easily make changes to their expense policy, and which help them to manage expenses more effectively.
