When there is a cost of living crisis, employers in the most expensive towns and cities will often feel the impact the most. Although not the most expensive, Bath is nonetheless an expensive place to live, which puts pressure on employers in the area to provide a competitive wage.
The impending increase to the National Living Wage will also have a huge impact on employers in the region. These changes will disproportionately impact employers that rely on low income workers under the age of 23; a demographic dominated by students. And with Bath being a popular university town, there are a lot of students looking for casual work that will see their wages increase from April.
With the cost of living crisis in mind, let’s look at some of the implications for employers in Bath and how changes to things like the National Living Wage might impact their operations.
How does a cost of living crisis impact employers?
When the cost of living increases, this not only has an impact on the cost of running a business, but it can also impact workers. Bath employers will be all too familiar with the changes in worker morale and motivation during difficult times. It’s vital for employers to be aware of how wider issues can impact their workforce so they can take action to prevent damage to productivity. These are just some of the ways your workers might be impacted:
- When the cost of living increases, some workers will be forced to look for second jobs to make ends meet. You might find that your workers are more tired due to taking on additional part time work, which means they have less rest time than usual.
- Some workers might ask to reduce their hours due to the increased cost of child care. It becomes less financially viable for both parents to work full time, which can lead some workers to look for part time work.
- Workers may become highly financially motivated, despite not showing an interest in this in the past. The promise of promotions and the lure of bonuses might be more important than ever before. You could also face an increase in requests for pay reviews.
- Some employers find it difficult to attract and retain talent during a cost of living crisis. Workers will be looking for the highest paid role available, and might turn to your competitors if you are not offering a comparable salary. Additional benefits and perks become less important than the base salary.
- Team morale may be affected. If one worker is struggling more than others, their negativity and demotivation can spread through the whole team. Even if some of your workers are not hugely impacted by the cost of living crisis, they might be disheartened to hear how their coworkers are struggling.
How can Bath employers respond to these challenges?
Bath is a highly desirable place to live and work, so you can be confident you’ll have a large pool of workers looking for their next role. As a university town, you’ll also have students looking for part time work, and talented graduates looking for their first opportunity.
The most important thing to remember during a cost of living crisis is that money is highly motivating. You need to be aware of the current market value of the role you are hiring for. You can then position yourself accordingly. Do you want to be seen as the highest paying employer in your sector, or would you like potential employees to see you as a safe and stable bet? How you position yourself will have a huge impact on the type of applicants you attract.
When there is a cost of living crisis, workers might be more inclined to jump ship if they have a chance to increase their earning potential. On the other hand, some might see the increased cost of living as a reason to stay in a secure and stable environment. You can take advantage of this desire for security and make the most of the perks that come with employee retention.
In April 2024, the National Living Wage will be increasing, and this will help to boost the wages of around 2 million low paid workers under the age of 23. University students looking for part time and flexible work will be among those set to benefit from these changes. If you’re facing increased employee costs as a result of these changes, consider how you can get the most out of this newly motivated workforce. Morale will be at an all-time-high, so this could be a good time to introduce new training to upskill your employees.
Closing thoughts
The cost of living crisis will change the way you go about recruitment tasks, but it can also offer some unexpected benefits, including increased staff retention. By making sure you are aware of the market value of roles and offering a competitive employment package, you can ensure the cost of living crisis does not negatively impact your employees and your company.
