You already know that you’re paying more for the things your business needs. From office supplies and professional services to raw materials and fuel tariffs, everything is taking a slightly bigger bite of your bottom line.
So, let’s approach rising costs from a slightly different angle. In this article, we’ll take a look at how the cost of living crisis is impacting your people – and the knock-on effect that could have on your business. We’ll ask:
Last week Kwasi Kwarteng unveiled his Growth Plan 2022, announcing 30 new measures to help us weather the current economic storm. Not least of which is the government’s Energy Bill Relief Scheme. In short, the cost of gas and electricity will be frozen at new government supported prices for six months from 1 October.
But because the cost of living is being driven up by so many variables, for many the energy price freeze doesn’t feel like a fool proof solution. Across the UK, people are still bracing themselves for an expensive winter and looking for ways to put off putting their heating on for as long as possible.
So, what does that have to do with your business? If you’re using a hybrid or flexible working model, you might find more and more staff members choosing to work from the office this winter. That’s because every hour spent outside of their home is one less hour that they have to worry about heating it. In fact, you might even be considering this strategy yourself.
Adding an hour either side for commuting, employees can keep their radiators off for 11 hours every day by working at the office. During that time they can leave the lights off at home, even unplug the Wi-Fi and use office power sockets to fire up their laptops. Not to mention the pennies they’ll pinch on hot drinks and snacks if it’s part of your wellbeing policy to make these available.
In addition to meeting rooms becoming a hot commodity, here’s how that higher foot traffic is likely to impact your business:
That means spending more money on all of the above and upping your orders to make sure you don’t run out of the essentials. Don’t delay working this into your budget or shy away from looking into alternative suppliers that can offer better prices. If your current rate of chocolate digestive consumption supports a Waitrose price tag, you might find Aldi more cost-effective as the biscuit tin starts to empty faster.
Using more energy is almost unavoidable in winter – you and your team can’t work if you can’t feel your fingers. But you can be mindful of conserving energy where possible by switching off lights in unused areas, making sure windows and doors are sealing correctly, shutting computers down overnight and so on.
While the impact on your overheads is far from ideal, there are other potential consequences that might be more complicated from both a logistical and financial perspective:
Complicated these may be, but we do have some solutions for you to consider.
If there’s room for improvement
If it’s feasible to use your current office more efficiently as well as install more desks and other equipment, then make this a priority before winter is in full swing. Are there better storage solutions that can free up floor space for extra desks? A clever configuration to maximise capacity? Consider what you can do with the space you have, how much new furniture or equipment you might need to buy and what the most cost-effective way of doing that is going to be.
If parking or fuel is a problem
Parking is a trickier obstacle to overcome; you may need to investigate other parking options in your area. If your office parking is free but overflow areas aren’t, you may need to work this into your employee expense policy.
With Soldo, you can issue every employee their own prepaid card loaded with a set daily, weekly or monthly limit. They won’t have to spend their own money on parking or wait to be reimbursed, and you won’t waste time chasing receipts at the end of the month.
If your team is currently expensing their fuel for travel to the office, you’ll need to decide how to treat this going forward. Can your budget stretch to a daily commute and, importantly, do you want it to?
If your expense policy was designed for a hybrid team, you might not want to make permanent changes for a temporary situation. You could consider covering fuel costs up to a certain limit – whether that’s in line with what you cover currently, or slightly more over winter if your budget allows for an increase.
If your office isn’t big enough
If you already know that you don’t have enough office space for your entire team, you’ll need to act quickly. Moving to bigger premises when budgets are already constrained may not make sense – especially if office attendance is likely to drop off again in spring. But you want to do your best by your team.
One option could be looking into a co-working space membership. Plans differ across providers but most offer flexible memberships where employees can book a hot desk for the day. You can specify a location or give staff members a choice of locations depending on where they live.
But if this isn’t in your budget, or simply isn’t available in your area, you might have to treat the cause of your capacity challenges, rather than the symptoms. Be open and honest with your team: the office you chose for your business was done so with hybrid working in mind. You want to meet employee needs but you also need to work with the space available. If your hybrid working policy is relatively informal, consider making it more concrete. For example, guaranteeing each person two or three days in the office each week and setting up a rota system.
For the days when staff members are working from home, you could offer a few out-of-office perks like funds to grab a coffee or lunch once a week somewhere local. A little bit can go a long way to making your team feel appreciated and well looked after.
Keeping in mind that this is still a hypothetical scenario, start by testing the theory. If your team is relatively small, simply pose the question – find out if everyone is planning to be in the office full-time this winter. For a bigger team, you could ask managers to speak to their direct reports or send out a companywide survey.
If indeed you and your team are planning to spend more time in the office this winter, start preparing today. Make sure your winter plans account for everything from higher energy bills to increased spend on coffee and bigger challenges such as parking, office capacity and equipment availability.
Try to find the balance between supporting your people and keeping costs low where you can. Both will be essential this winter.
Find out where Soldo fits into your winter plan or subscribe for more articles like this one.
Changes are being brought in to harmonise HMRC’s penalties, as currently, there is no consistency across the tax system. For example, filing your annual self-assessment return one day late results in an instant £100 fine. At the same time, there are many instances where the late filing of a VAT return for the first time doesn’t result in any charges.