The cost of living crisis is testing businesses in many ways right now, prompting them to make big calls. But it doesn't mean casting aside your employer brand. When change is taking place it can be an organisation's greatest asset...
True character, it is said, is revealed under pressure.
And right now, businesses that have already experienced a tough time surviving a pandemic find themselves beleaguered by new problems in the form of inflationary pressures, increased overheads, wage demands, problems with employee wellbeing and motivation and a range of other issues that are outside of their control.
In the Office of National Statistics’ most recent update, yearly growth in annual pay stood at 5.7% in the period July to September 2022 (6% once bonuses are included).
Although pay has been growing in some cases, however, the figure has failed to keep pace with rampant inflation, which is currently over 10%. The highest in decades. In real terms, pay has fallen at a rate of 2.6% year on year - among the highest drops since the ONS started recording real earnings in 2001.
And concern over the cost of living is starting to have an effect on the workforce.
According to the Financial Capability Strategy for the UK:
- 25% of workers have lost sleep over money worries
- More than half of employees say that current financial worries stop them from performing at their best
- 46% of employees say that financial pressure affects their relationship with their manager
And all this comes within the context of a workforce (or at least elements of it) that is reportedly disengaged. Financial uncertainty means that the phenomenon of so-called ‘quiet quitting’ seems to have transformed into ‘quiet laziness’ where workers are no longer taking the risk of leaving but are doing the least amount to stay in the job. A risk in itself, perhaps, and certainly not a positive for employers, particularly if they choose to believe that because employees are staying, there is no problem with engagement.
Employee retention
It has also become increasingly hard to retain certain groups of employees.
ONS numbers show those aged over 50 saw the largest increase of inactive people among all age groups since the start of the pandemic, following a historical downward trend since records began in 1971.
The number of those aged 50 to 70 years moving from economic activity to inactivity between Q2 (Apr to June) and Q3 (July to September) 2021 was 87,000 higher than in the same period in 2019. The increased flow to inactivity was driven by full-time workers.
The energy crisis is having an unforeseen effect on attitudes towards flexible working. Just when it had become an accepted part of working life and 85% of people who are dividing their working hours between home and the office say they want to continue doing so (according to McKinsey) the waters have become muddied. Workers are now weighing up the cost of commuting against the cost of heating their home office.
There are lot of variables at play and still a lot of “known unknowns and unknown unknowns” to paraphrase former US defence secretary, Donald Rumsfeld.
Crisis help for employees
When it comes to helping employees, plenty of solutions have been mooted including:
- One-off payments
- Discount schemes and vouchers for employees
- Help with working from home expenses
- Private meetings and expert sessions on money management
- Training for senior staff to support colleagues
- Salary sacrifice schemes
- Early wage advance/on-demand pay options
All positive moves, that are unlikely to scare the horses. There is, however, an increased likelihood that tougher decisions may be called for in the form of job losses or simply a halt to recruiting much-needed extra resource.
Whatever the context, your employer brand will be put to the test and it must remain your North Star for retaining goodwill and reputation in the most precarious times.
That is why an employer brand needs to be built for internal and external use right from the start.
It is the part where the true character of the organisation and its leaders needs to show up. This is the bit where everything that you've been talking about since you established your EVP and employer brand will be put to the test.
What you're looking for through any transition and period of volatility, is consistency - things that actually don't change, regardless of the situation. It gives leadership something to cling to, and point at to inspire confidence and clarity about what the organisation is and what it is not.
It can't be like Groucho Marx said: “Those are my principles and if you don’t like them…well, I have others.”
Your actions need to be consistent and coherent with what you've been saying. And of course, you then need to temper that with the required agility to respond if something is inappropriate, or quite obviously outdated because of what has happened. Then, maybe, it becomes an opportunity.
But it can also be a threat if you don't listen, or don’t have the agility to also be very intentional about communicating what needs to shift as a result of the organisation changing.
Whatever you must do, in lockstep with the organisation changing, it will be authentic, and welcomed (or at the very least understood) as long as it's part of a positive, open, and authentic dialogue.
In these uncertain volatile times, hopefully your employer brand can remain consistent, but the specifics of the EVP proposition might need to change based on the landscape.
It should test the integrity of the whole thing and you need to have the agility to listen to feedback and stress test it. And as a result it might need to be updated. It might be the case that it still absolutely rings true, but you need more up to date stories to reflect the times that you're in.
If you tell the same stories, but from the current, altered, position, it could come across as tone deaf to talk about growth and expansion while you’re having to make cuts and adjustments.
Go back to that position of the true character's point. That’s the litmus test of your employer brand.