According to recent research* 70% of HR professionals highlighted the cost of living as their most significant challenge for 2023. This was closely followed by retention (69%) and recruitment (55%).
The cost of living crisis has created ripples in the economy, affecting employees and businesses alike, so for HR professionals to see it as their most significant challenge comes as no surprise. However, due to the consequences created, HR is expected to continue to face a series of issues this year.
Here are five trends HR can expect to face this year.
Employees with second jobs
Over the next few months, more and more employees will be thinking about how they will pay their bills, especially during the current climate with increasing bills and food prices. As a result, many will be required to take on second jobs to help them through.
There is no law prohibiting people from having two jobs. However, there are some challenges for HR and employers to consider in these situations. Besides considering any conflict of interest, there will be health and safety implications around working time regulations as well as considering the impact on the individual’s performance, engagement and productivity.
Regular communication with the individual will allow HR to monitor these situations and support the employee where necessary to ensure their continued performance in the job.
Redundancies and outplacement support
Another recent survey* revealed that over two-fifths (44%) of employers looking to make cost savings in their workforce are planning to restructure or make redundancies amid rising costs in the next 12 months.
Redundancy processes are difficult for all parties involved, from senior managers making the decisions to direct line managers having to give those difficult messages to the employees who may end up losing their jobs.
Outplacement support significantly benefits employees who may find themselves back on the job market, and we expect this area to grow. They can get practical support with preparing a CV, making those applications, getting through the interviews, and receiving career development coaching.
They can also provide emotional support to help the employee look forward to new opportunities and move beyond the processes they have been through.
As we have seen over the past few years, businesses must adapt quickly to changing environments to compete and thrive. These changes can vary in size, from moving desks in the office to more substantial changes through restructures, redundancy, TUPE, product developments and digital upgrades.
Unfortunately, these are often constant and, in many cases, could happen simultaneously. These can be overwhelming and lead to employee burnout, quiet quitting, increased sickness and resignations, all signs of ‘change fatigue’.
This year, employers and HR should look at ways to build their employees’ resilience and acceptance of change through effective communication and developing trust in the organisation. When communicating with staff on the mechanisms of the change, including information on the bigger picture of what the business wants to achieve, what the ultimate goal is, and how their contribution adds to the vision.
Engaging with staff by asking and listening to feedback and getting them involved with the change will help get the team’s buy-in. Employers must always consider the emotional needs of their staff, putting themselves in their shoes and asking how they would feel in their place. This will help formulate the communication strategy and support mechanisms they can implement to move any change programme forward.
Since the start of the pandemic, many people have taken time to assess what is important to them and what makes them happy. They have also considered the things that don’t make them happy or cause more stress. Mental health and wellbeing information and support programmes have helped these considerations.
As a result, many people will cut down on the stresses they feel in their lives, with people not willing to jeopardise their newfound balance. However, this often will result in staff fighting the expectation to work long hours, and high pressures demanded in previous times, staff being unwilling to take on additional tasks with little or no compensation. Recently this has been labelled as ‘quiet quitting’; however, there is an argument that this is simply staff working according to the agreed terms of their employment.
In response to this trend, employers and HR need to consider whether they have unreasonable expectations of their staff, and adjustments need to be made to keep those staff engaged and productive. That said, those staff that usually go the extra mile and ‘step up’ will have the added advantage when promotions are being considered.
With many people worried about how they will cope financially in the current economic situation, there is expected to be an increase in the requests for pay increases for staff. Of course, not all organisations will be able or willing to go a little extra on their annual pay increase, but they should give some thought to additional ways to support their staff.
The one-off cost of living discretionary bonuses is a popular option for those that can afford them. For those able to, working from home can save substantially on commuting costs or interest-free hardship loans can help tide staff over in difficult times.
It may be a good time for employers and HR to review their benefits options for staff, looking at specific money-saving benefits, e.g. staff discount schemes or covering payments for professional subscriptions. In addition, they could consider making their benefits package more flexible so employees can swap certain benefits they do not need for money or alternative benefits.
Many employee assistance programmes (EAPs) will offer debt counselling and may be able to run financial education programmes to help staff cope. Funded meals, company food banks, clothing recycling services or advert boards might be a way to provide practical solutions to people on a day-to-day basis. These are just a few ideas on what employers can do to help their staff through these worrying times.
Surveys by WorkNest