The cost-of-living crisis is putting real pressure on SME’s, start-ups and also larger businesses. It is not just the fact that raw materials, stock and energy prices have spiralled. It is also wages and the cost of labour. With inflation heading towards 11%, the cost of a weekly shop going up and rising interest rates, many employees are struggling. What can employers and business owners do? Do you sit back and hope the Government’s energy price cap will ease the pressure? Or, is it time to look directly at your own salary costs? 
Many employees are looking at their employer and hoping that they will get some form of salary increase. How do you manage expectations here? If revenue and turnover are down due to the current economic climate, now is not the right time to be thinking of raising salaries. Many SME’s and larger businesses simply cannot afford this. Some of the big banks and supermarkets have stepped in and offered support; all kudos to them. But many businesses are not so fortunate. What can you realistically do? How do you manage employee’s expectations and keep everyone motivated and engaged? A tall order perhaps but it is definitely achievable. 
We at Brilliant HR thought we would share with you some strategies to help employees through the cost-of-living crisis. Having spoken with our clients across hospitality, retail, manufacturing, nurseries and many other sectors here are our top five tips: 
• Communication – it is easy to bury your head in the sand and do nothing. It will surely blow over and the Government are in the process of finalising the energy cap. So, best to sit tight and do nothing. Right? This is the worst approach and is a strategy that could backfire. Employees are expecting at least an acknowledgment that things are tough, that you understand the anxiety and recognise it. Strong communication is key here. Explain to employees that you understand that things are difficult and that you will do everything you can to support. A letter or email to all staff can be simple and effective. 
• Honesty – not everyone can increase their hourly rates or salaries. If this is not an option, then be up front about this. Explain why this is the case, reassure employees about the long term and the fact that jobs are secure. If it is possible to offer an increase (even if on a temporary basis), then do so. Remember to document any salary changes or variations to contract in writing. 
• Be Creative – many hospitality or retail clients are giving away food at the end of the week or offering discounts on beverages, clothing and other essentials. It shows you care and are taking the situation seriously as an employer. Be creative as sometimes there are other ways of rewarding staff and helping them through difficult times without increasing pay. 
• Review Your Salary & Benefits – now is a real point of reflection to see what is and isn’t working in your salary and benefits packages. What do staff really want? Is it time to focus more on base pay rather than other fringe benefits? If some benefits are removed, is there headroom for a pay increase? A critical review of your current offering and some benchmarking in your industry sector will prove really useful. 
• Recruitment & Retention – there is a flight risk for employees who may decide to leave for a better paid role. Care homes, hospitality and retail have all faced this significant challenge. Losing highly skilled staff to a competitor is something to be avoided. Looking at all the above points and thinking about ways to retain staff and keep them motivated is essential. Sometimes it is simply recognition and communication; or you may have to take the commercial decision to increase pay when weighed against recruitment costs, business disruption or skills gaps. 
Brilliant HR has a simple mission statement to deliver HR brilliantly. We offer Director lead HR consultancy and employment law support to SME’s, start-ups and larger businesses. If you need any support or advice with employee issues arising in response to the costs of living crisis, please get in touch (, Be bold. Be Brilliant. 
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