How small businesses and their employees can both win as cost of living pressures rise

As employers continue to feel the pinch in this tight economic market, they’re faced with the need to cut costs. Employees are also feeling the pinch. They’re cutting costs too.

With pressure rising thanks to multiple interest rate increases and a higher cost of living, there’s a natural tendency to think of the situation as being a matter of employer vs employee. I’m seeing it in the conversations that I’m having. Many employers are losing patience with employees asking for what they want, and many employees are feeling undervalued and stretched thin.

The current state of play

The recent budget announcement delivered some hopeful news to SMEs, women and families. However, some measures will take time to come to fruition. Right now, everyone is under the pump.

Recent research from the Wellbeing Lab and Australia Human Resources Institute found that the number of Australian employees who are struggling has risen by 40% since 2021. This includes those at the executive level. Whilst this is not overly surprising, it is troubling.

The 2023 Australian and New Zealand Workforce Trends report published by Mccrindle and Frontline Recruitment group found that 60% of respondents have considered leaving their employer. Of the 41% who decided to stay, 90% did so due to job security.

On face value and considering the lowest unemployment rate in nearly 50 years of 3.5%, employers would be forgiven for thinking their people are becoming more loyal. However, the data may suggest that Australians aren’t staying because they love where they work, they’re staying because the economy is tough and they’re seeking job security.

So how can businesses support their people feeling the crunch, whilst also feeling the crunch themselves? As cliché as it sounds, it’s about meeting each other halfway.

Employers and Senior Leaders

The businesses that support their people now, when times are tough, will see a high return on investment when things inevitably get easier.

So what can be done to address this support?

• Invite your people in for genuine, honest conversations and ask them what they need right now. Their needs may surprise you. Whilst you may not be able to deliver on some of them, meeting them where you can, sharing where you’re at and showing that you’ve seen and heard them is valuable in and of itself.

• Don’t let your most vulnerable slip through the cracks. Make sure you’re checking in and having regular *real* conversations with your team. Put effort into knowing each individual you manage so that you can pick up when things don’t seem right and rally around them.

• Get creative about how you can help your people. Can you offer advance pay if needed? Many employees have high personal (sick) leave allowances — are you encouraging them to use it as mental health and carers leave? Whilst you may not be able to afford salary increases at scale, perhaps you can afford learning and development support.

• Acknowledge the mental load your people, particularly parents, carry. Be fair and reasonable with what you’re asking of your people during this time. Many don’t have ‘more’ in the tank to give. How can priorities be re-evaluated so that your people aren’t sacrificing themselves in the name of ‘efficiencies and targets’.

The pressure that business owners and leaders are facing is undeniable. The key lies in levelling with your people, working with and supporting them, so you reduce the risk of a mass exodus when you come out the other side. Loyalty towards your people breeds loyalty in return.

Women employees in the workplace

Recently, I’ve had many conversations where people felt overworked, under-appreciated and scared. While employers hold a significant duty of care toward their people, there are things women can do to support themselves and have their employer’s back during this time.

Below are a few ideas.

• Many employers can’t increase salaries right now. Can you still ask for a salary increase? Of course. You need to make sure you enter that conversation well-prepared, acknowledge the climate and be flexible. Perhaps you agree to a phased increase so that it’s more affordable, or there may be other things they can offer that can make up for it.

• While I acknowledge this depends on your relationship with your manager/employer, speak up when you’re feeling the crunch. Advocate for your needs. In my experience as an HR professional, most people want to help. It’s simply that sometimes things are moving so fast, they cannot see it until you ask.

• The reality is that employers need to be careful with budgets and spending right now. So, how can you be part of the solution? Play the long game. Offer up ideas, take action and ensure your voice is heard. Leading through change and difficulty now, will likely come back to benefit you when your employer can increase spending.

It can be easy to think of your employer as an entity. It’s helpful to remember that those in senior leadership positions, making many of these decisions, are also feeling the pressure. Mostly, everyone is trying to do their best. Blocking out the noise and connecting on a human level can make every bit of difference.

Note: Every situation is nuanced. There is so much grey that will influence an appropriate course of action. Please note that I share these high-level thoughts, not as a blanket solution but to inspire reflection and action.

This article was first published by Women’s Agenda.