Cost of living crisis has changed culture in SMEs

Almost all (99%) SMEs have said they have noticed behavioural changes across their team as a result of financial constraints in the last six months.

The vast majority (95%) of SMEs say the financial crisis is impacting workplace culture, according to research from business expense solution Pleo.

The study, which surveyed 500 business leaders in the UK, also found three in five UK businesses have been forced to reduce or put an end to staff promotions, bonuses and social events as economic uncertainty lingers.

Employees are also making changes as almost a third (32%) said they had pushed back on requests to come back to the office with many (35%) citing high commuting costs.

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A different study from employee engagement platform Blackhawk Network found over two thirds (68%) of employers received requests for financial support from their employees.

Over half (53%) said they think their employer could do more to support them through the cost of living crisis.

Hannah Sanford, head of people and wellbeing at data analytics tool Qudo, said HR should focus on communication channels and data to find out how to provide effective support.

Speaking HR magazine, she said: “Surveys, one-to-ones and suggestion boxes are great ways for people to express their financial constraints, providing the business with information on how to support them and their needs best.”

She pushed for employers to be more clear on the scope of support and find solutions that work for as many people as possible.

Sanford added: “From an HR perspective, remember that it can be challenging to provide for each individual, so find a balance or come up with solutions from which the majority can benefit. It’s important to be consistent in your approach, and if you offer something as a one-off, such as a cost of living increase, make it clear to manage expectations."

Lou Campbell, programme director of employee mental health service Wellbeing Partners, said employee mental health should be considered during this time.

She said: "At Wellbeing Partners we’ve seen a 253% increase of employees accessing our one-to-one counselling and wellbeing coaching sessions, including a very large number of employees feeling anxious about issues related to the cost of living crisis.

“It is imperative that workplaces train their managers to be able to have supportive conversations with team members who are struggling, as many are at the moment with financial strains. 

“Furthermore, an in-house counselling and wellbeing service can offer targeted support to individuals based on their individual needs. This is how progressive companies are helping to support the mental health of employees during the crisis,” she said.

The UK findings of Pleo’s State of Spending survey is based on the opinion of 500 SME decision makers. The broader research was conducted with 3,504 senior decision-makers across the UK, France, Germany, Spain, the Netherlands, Denmark and Sweden.

Blackhawk Network conducted two UK-wide surveys. The first with 500 HR decision-makers in SMEs, and the second with 2,000 employees across a range of sectors in SMEs, including education, IT, manufacturing and healthcare.