What businesses can do to help tackle the cost of living crisis

The government’s new cost of living tsar has urged businesses to “step up” and bring new ideas for tackling the ongoing crisis. 

Speaking to the Confederation of British Industry (CBI), David Buttress said business leaders need to join a national effort in cutting costs. 

As parents skip meals to feed their children and people cannot afford hot showers, campaigners have repeatedly called on the government to take more action to support vulnerable people.

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But the former Just Eat chief has instead put businesses in the firing line and said they must play their part in “easing the burden”.

So what can companies do to help? Charity Business in the Community published a briefing earlier this month outlining the practical steps employers can take to help their staff amid the crisis. 

Here are five changes employers can make to their business to tackle the cost of living crisis and help vulnerable people across the country. 

Ensure their staff are being paid enough to live

A total of 3.7 million people in the UK are in low paid and insecure work – that’s around 12 per cent of the working population. According to Business in the Community, three quarters of workers are considering finding a new job because of the soaring cost of living. 

Companies could help by paying the “real living wage”, an independently-calculated rate set by the Living Wage Foundation (LWF). It is based on the cost of living and is currently £9.90 per hour in the UK and £11.05 in London. The annual announcement of the 2022 to 2023 Living Wage rates are being brought forward to late September this year because of the cost of living crisis. 

Katherine Chapman, director of the LWF , said: “The real living wage is the UK’s only wage rate independently calculated to meet the cost of living and, for workers struggling to keep their heads above water as prices surge, it’s more important than ever before.”

Manny Hothi, chief executive of Trust for London, added: “We can continue to push for more people to be paid the real Living Wage. Ignore the advice from the governor of the Bank of England to exercise pay restraint. We should never be afraid to demand that those who are working yet in poverty are paid more, surely a basic principle of any healthy economy.”

Businesses can conduct pay audits to work out the gap between the highest and lowest paid employees, and calculate fair pay ratios. Companies have also been urged to consider cost of living pay rises for staff – this has already been done at Marks & Spencer, Currys and others. 

This summer, the UK could face a “summer of discontent”. Industrial disputes are on the rise as workers demand better pay and conditions. We have already seen the largest rail strike in three decades with rail workers calling for increased wages.

Last week The Big Issue also revealed a “food bank” had been set up for staff in a BT Group call centre, leading to accusations of in-work poverty.

Support small businesses

Employers can make sure pay is on time – not just when paying employees but their suppliers too. If businesses fail to pay other businesses, it could have a domino effect.

Veronica Bamford-Deane, of the fundraising platform Work for Good, said: “Some ways businesses can help other businesses as well as their local communities include making sure they pay wages of employees and invoices for their suppliers on time.”

Small businesses may be struggling with the soaring costs of living themselves, so Bamford-Deane says it’s important that businesses support each other. This could be by sharing information about accessible funds or support networks for businesses in need – such as Small Business Britain, Digital Boost and Enterprise Nation. 

Support people struggling with bills

Bosses in the telecoms industry have already agreed to a government plan to support customers struggling with the cost of living. BT, Virgin, TalkTalk, Sky, Vodafone and other companies have pledged to offer ways to keep people connected. That might mean offering cheaper packages without hidden charges, or showing compassion to customers and providing manageable payment plans. 

Campaigners have called on big energy firms to make bills cheaper too. Some companies offer schemes or grants to help with home heating and energy costs. British Gas has an energy support grant, for example, and Scots can apply for the Scottish Power hardship fund.

Slash prices wherever possible – don’t raise them

A total of 94 per cent of adults have said that the price of their food shop has increased over the last month, according to data from the Office for National Statistics.

The average price of pasta increased by more than 50 per cent between April 2021 and 2022. It now costs an average of 53p for a 500g bag of pasta, where it would have cost 36p for the same bag last year.

Large companies could look to slash prices and offer discounts wherever possible to help people struggling with the cost of living. Asda announced earlier this year that it was spending more than £73m attempting to keep prices low for its shoppers. Over 100 items had their prices dropped and locked until 2022. 

Buttress has also reportedly called on businesses to consider how they can create better deals over the summer holidays when so many families are struggling. Supermarkets could introduce deals for school uniforms, back to school items and companies could offer free meals to children with no free school meals over the holidays.

Greggs’ breakfast clubs offer free breakfasts to over 44,000 children every school day. There are already over 680 clubs across the UK, and Greggs is pledging to have over 760 open by the end of the year.

Increase wellbeing support for staff and offer flexible working

A spokesperson for the CBI said many businesses are already “providing more flexibility regarding ways of working and offering increased wellbeing assistance”.

But there is still more that businesses can do to support their employees’ wellbeing. Over half of the population has said that the cost of living crisis has negatively impacted their mental health, according to the Royal College of Physicians. 

Business in the Community is urging all employers to increase financial support available to staff. This might be through support with financial planning or by covering costs – such as commuter subsidies, hardship loans, payment holidays or contributions to pension and insurance. 

Employers can signpost to social enterprises such as the Reuse Network where you can find high-quality, affordable household items including furniture, electrical appliances, IT equipment and more.

Businesses should be aiming to improve working environments and offer external support. Bupa, for example, offers health and wellbeing services to businesses. Charities such as Mind have free resources available with tips on creating open and supportive workplaces. 

One in five women have considered quitting or have quit a job because of the difficulties balancing work and care responsibilities, according to Business in the Community. With greater flexibility in working, employers will take the pressure off of working carers. 

This might mean giving more employees the option to work from home or being flexible with hours. Employers are also urged to give greater direct support with care, such as offering childcare loans. 

Champion equality and diversity

Ethnic minority workers are being disproportionately impacted by the cost of living crisis because they are more likely to be in severely insecure work than white people (24 per cent versus 19 per cent). 

Business in the Community also reports that during times of economic crisis, “women tend to act as shock absorbers”. This is because they are already paid less than men. Some 20.4 per cent of women are paid below the real Living Wage, compared to 14 per cent of men. 

They are also more likely to have caring responsibilities and have a disproportionate share of the household shopping. This all makes the cost of living crisis more acute for women. 

Disabled people are also being hit particularly hard by the cost of living crisis. Almost three million facing an average support shortfall of £367 a year, disability equality charity Scope has found. 

Businesses should ensure that they recognise that women, disabled people and people from ethnic minority backgrounds may be struggling at this time of crisis, Business in the Community said. Employers should also assess equality in their company and ensure that they are taking steps to support those who need the most help.

Make sustainable choices

Fuel poverty is soaring. Household energy bills increased by 54 per cent in April, a record increase caused by regulator Ofgem increasing the price cap – the maximum energy companies can charge. The monthly rise in both gas and electricity prices were by far the largest recorded since 1988.

According to Business in the Community, “failure to sufficiently invest in renewable energy production and to properly insulate homes at scale has led to a situation where the number of households in fuel poverty will increase by more than 50 per cent in 2022”. 

Big banks have repeatedly been criticised for investing billions into new oil and gas production despite pledging to reduce their environmental impact. These include HSBC, Barclays and Deutsche Bank.

Businesses can also make better choices with food. Across the UK, two million tonnes of food is wasted annually. At the same time, millions of families are going hungry across the country. A total of 7.3 million adults and 2.6 million children experienced food poverty in April 2022, according to the Food Foundation.

Bamford-Deane, of Work for Good, said that businesses should ensure that no food goes to waste. This could be achieved by teaming up with apps such as Too Good to Go and Olio.