· News

How to tackle the cost of working crisis

Employers’ top priority is for the government to help candidates overcome financial barriers to work, a study has found

Employers want the UK government to prioritise financial support for new workers, according to a survey conducted in March by the Recruitment and Employment Confederation (REC) in collaboration with the Institute for Employment Studies (IES).

The two organisations commissioned a survey of 172 UK employers in response to the government’s newly introduced welfare-to-work reforms, which prompted the REC and IES to explore what help employers might need to find, recruit and retain the right people.

Employers’ top priority is for the government to provide funding to support new recruits in overcoming financial barriers to work, such as transport, childcare or work clothes costs. ‘Support to identify and access skills training’ was the second-highest priority.

Speaking to HR magazine, Suki Kaur, director of people for the tax firm Avask Group, said: “The survey's findings underscore the pervasive impact of cost of living concerns as a formidable barrier to recruitment. Expenses like transport and childcare, and the financial strain of maintaining appropriate work attire, can significantly impede individuals from entering the workforce and undermine their performance once employed.”

Read more: Young people turning down jobs over transport and uniform costs 

Daniella Pye, associate director for the recruitment firm Sellick Partnership, agreed, telling HR magazine: “The costs associated with entering a profession have led to an undeniable candidate shortage challenge.”

But for Craig Sweeney, executive vice president of global strategic talent solutions for recruitment solutions provider WilsonHCG, cost of living concerns aren’t the only barriers to sourcing, though they exacerbate the issue.

Speaking to HR magazine, Sweeney said: “The skills crisis is arguably the most significant challenge at the moment. It’s promising, therefore, to see that supporting access to training is such a priority for employers, evidenced by the REC and IES’ survey results.”

Turning to solutions, and how HR leaders can address cost of working challenges, Larraine Boorman, chief executive at Optima UK – a recruitment, training and business consultancy – told HR magazine: “HR managers and recruiters must ensure wages remain within a company’s parameters. But they should also be looking at offering benefits packages that can help new employees.

“These benefits could include apps that offer discounts or provide access to reduced-cost medical, counselling, and money management services.”

But Nikki Kinsey, Sellick Partnership’s group director, warned that: “Financial wellbeing extends beyond the overall compensation package and encompasses financial literacy education, debt management support and access to resources that empower individuals to make informed financial decisions – even at the beginning of their career.”

Read more: Work expenses driving employees into debt

Pye argued that addressing cost of work challenges requires a complex approach, including innovative solutions to talent acquisition, investment in skill development programmes, and strategic workforce planning.

Kaur agreed: “Prioritising the financial wellbeing of new recruits necessitates a comprehensive and collaborative approach, involving both HR leaders and employers.” Her suggestions included organising financial planning workshops or seminars, introduce flexible benefits and fostering transparent communication.

Hannah Szymanski, market director finance and accounting for recruitment firm Robert Half, advised HR leaders to prioritise listening, to support the financial wellbeing of people who are new to work.

Speaking to HR magazine, Szymanski said: “One of the greatest things HR leaders can do right now to support the financial wellbeing of new recruits is to listen first and act afterwards. It’s easy to assume what will help workers but there needs to be a solid foundation of evidence to support the actions you take, otherwise the impact will be limited.”

Bolstering this argument, Zofia Bajorek, senior research fellow at the IES, told HR magazine: “There is still a stigma around talking about difficult financial situations in the workplace, which can make it hard for anyone, let alone new recruits to disclose and discuss financial barriers to work or accessing work.”

To address this, Bajorek advised HR leaders to ensure that a financial wellbeing policy is in place that flags up how organisations can support staff, and signposts to external sources of support.

Taking the wider picture into account, Sarah Jeffereys, head of the reward consulting practice at the insurance brokerage and risk consultancy Gallagher, told HR magazine: “Many employers are working around the clock to support the financial wellbeing of employees and adjusting their benefit schemes accordingly, but wellbeing requires even more attention during the cost-of-living crisis.

“It’s critical that people feel supported by their employer – even if an annual pay rise or bonus isn’t affordable this year. Firms must actively engage with new recruits to help them feel connected with their work, and provide a sense of achievement and satisfaction with their job from the get go.”