Will workplace flexibility be a casualty of the cost-of-living crisis?

The hybrid mod­el has emerged as the num­ber-one choice for work­ers in the knowl­edge econ­o­my. Research pub­lished by McK­in­sey in April found that 85% of peo­ple who are divid­ing their work­ing hours between home and the office want to con­tin­ue doing so. 

Part of the pop­u­lar­i­ty of this approach can be attrib­uted to the mon­ey that expo­nents can save, par­tic­u­lar­ly on trav­el. Mon­ey­Su­per­Mar­ket has esti­mat­ed that the aver­age UK office work­er would be £576 bet­ter off each year by com­mut­ing three days a week rather than five. 

But the finan­cial pic­ture is rarely as clear as it might seem, accord­ing to Peter Coop­er, direc­tor of peo­ple part­ner­ing at HR soft­ware firm Per­so­nio. 

“It’s hard to gen­er­alise about the impact of hybrid work­ing on employ­ees’ wal­lets, because people’s expe­ri­ences can vary a lot,” he says. “While work­ing from home might enable you to reduce your costs of com­mut­ing and hav­ing lunch­es out, say, the extent of those sav­ings will depend on myr­i­ad oth­er fac­tors.” 

For instance, fur­ther increas­es in domes­tic ener­gy costs will encour­age more peo­ple to work in the office rather than spend exces­sive amounts to heat their homes. On the oth­er hand, spi­ralling petrol and diesel costs will have the oppo­site effect on employ­ees who dri­ve to work.

A poll of near­ly 3,000 work­ers by recruiter Rand­stad UK in April found that 45% were think­ing about ask­ing their employ­ers to let them work more time remote­ly in a bid to mit­i­gate price infla­tion on the fore­courts. Con­verse­ly, a sur­vey of near­ly 1,900 work­ers by Elec­tric Radi­a­tors UK in Novem­ber 2021 found that 49% of remote work­ers were con­sid­er­ing a return to full-time office work to reduce their domes­tic gas and elec­tric­i­ty bills. 

Such costs affect employ­ers too, of course. In Octo­ber 2021, for instance, a poll of small and medi­um-sized firms pub­lished by smart meter provider Smart Ener­gy GB found that 30% were think­ing about clos­ing their offices dur­ing the win­ter, as some were fac­ing a 250% increase in their ener­gy bills. 

Busi­ness­es shouldn’t make hasty deci­sions in this respect, accord­ing to Coop­er. 

“If there’s one thing we’ve learnt over the past cou­ple of years, it’s that peo­ple poli­cies shouldn’t be reac­tionary, cre­at­ed on a whim in response to sud­den surges in employ­ee demand,” he says. “So, while ris­ing ener­gy bills are a clear con­cern for many employ­ers, it’s impor­tant for them to take time to under­stand the issues that real­ly mat­ter to their employ­ees. This ensures that any poli­cies they put in place are prop­er­ly con­sid­ered and sus­tain­able.”

But that can be eas­i­er said than done for many employ­ers, because of the uncer­tain ground that they have found them­selves on. Com­pa­nies that have adapt­ed quick­ly to hybrid work­ing often don’t have steady pro­ce­dur­al or legal prece­dents to draw upon. 

“This is a typ­i­cal conun­drum con­cern­ing how cul­ture and work mod­el­ling have moved more quick­ly than peo­ple-relat­ed laws,” says Char­lene Brown, co-founder and MD of employ­ment law firm Howlett Brown. “On the face of it, it sounds quite sim­ple: work from home part­ly or work from home ful­ly. But it’s far more com­plex from an employ­er’s per­spec­tive – there are so many poten­tial prob­lems.”

For instance, busi­ness­es that adopt remote work­ing may need to con­duct health and safe­ty assess­ments at employ­ees’ homes, as well as con­tribut­ing to ener­gy costs incurred on com­pa­ny time. For those that have retained a cen­tral office and adopt­ed poli­cies such as hot-desk­ing, health and safe­ty checks on those premis­es become more dif­fi­cult. 

In Brown’s expe­ri­ence, firms eager to bring their employ­ees back to HQ have far out­num­bered those that are hap­py to retain a high lev­el of remote work­ing. She believes that employ­ers will con­tin­ue with hybrid work­ing for the fore­see­able future. 

“I think most com­pa­nies are engag­ing in it pure­ly to retain tal­ent and ensure the right cul­ture, as opposed to man­ag­ing any kind of legal risk,” Brown says. 

As liv­ing costs in the UK are expect­ed to increase even fur­ther this year, what can busi­ness­es do to pre­serve hybrid work­ing? 

N‑21, a group of media agen­cies based in New­cas­tle upon Tyne, recent­ly announced a flat annu­al salary increase of £1,500 for all employ­ees. 

“We set it as a fixed amount, rather than a per­cent­age of salary, because we all know that peo­ple on low­er incomes tend to suf­fer more,” explains its CEO, Neil Rob­bins. “In the end, it came down to doing the right thing. We sat down with our finance depart­ment and worked out that we could help, so that’s what we did.” 

With employ­ees spread across north-east Eng­land, as well as in the US and Aus­tralia, N‑21 saw a clear busi­ness need to give them the flex­i­bil­i­ty to work wher­ev­er they want­ed. As such, there’s no expec­ta­tion for peo­ple to attend the office for a set num­ber of days each week. Rob­bins believes that the uni­ver­sal pay rise under­lines the business’s com­mit­ment to flex­i­bil­i­ty. 

“We try to cre­ate an envi­ron­ment that sim­ply enables peo­ple to choose what works best for them,” he says. 

For com­pa­nies that can’t afford to fol­low N‑21’s exam­ple, a greater focus on sup­port­ing employ­ees’ finan­cial wel­fare is required. So says Joan­na Bean, peo­ple direc­tor at Cushon, a fin­tech firm that helps employ­ers to do this with prod­ucts such as a pen­sion that invests only in net-zero envi­ron­men­tal projects. 

“This is about imple­ment­ing the tools that employ­ees can access from any­where to sup­port their finan­cial well­be­ing, as well as their phys­i­cal and men­tal well­be­ing,” she says. 

While there is no legal imper­a­tive to pro­vide such sup­port, it could become a cru­cial part of tal­ent reten­tion along­side a com­mit­ment to flex­i­ble work­ing. A poll of 2,000 work­ers pub­lished in Sep­tem­ber 2020 by finan­cial well­be­ing plat­form Nudge Glob­al found that only 33% thought their employ­ers were doing enough to sup­port their finan­cial well­be­ing.

Cushon helps its clients’ employ­ees to man­age their mon­ey more effec­tive­ly with a suite of tools. For instance, it pro­vides arti­cles and webi­na­rs to guide peo­ple through their imme­di­ate bud­get­ing con­cerns and build towards achiev­ing longer-term finan­cial secu­ri­ty.

Unsur­pris­ing­ly, Bean reports that these ser­vices have become increas­ing­ly pop­u­lar in recent months. “I don’t think you can get too basic with your sup­port,” she says. “If every­one under­stands how to bud­get bet­ter, you’re halfway there.”

While busi­ness­es may have to pro­vide more imme­di­ate sup­port and perks such as shop­ping vouch­ers and imme­di­ate advice about reg­u­lar out­go­ings, she argues that a holis­tic approach to ensur­ing people’s finan­cial well­be­ing is need­ed. 

“How do you save bet­ter? How do you bud­get bet­ter? What are the pen­sions avail­able to you?” asks Bean, who believes that fur­ther increas­es in the cost of liv­ing might require busi­ness­es to be even more flex­i­ble. “If you look at the whole pic­ture, peo­ple will notice a dif­fer­ence in their take-home pay.” 

Like N‑21, Cushon doesn’t man­date a set num­ber of days for its employ­ees to attend the office. This pol­i­cy accom­mo­dates the vary­ing rou­tines of staff in its three loca­tions, two in Greater Lon­don and one in Belfast. Even with dif­fer­ent needs, and poten­tial­ly dif­fer­ent drains on resources based on loca­tion, the best approach remains the same, accord­ing to Bean. 

“There’s no real group opin­ion any­more,” she says. “You can’t have a one-size-fits-all approach. It just won’t work.”