Business owners ignore stress of cost-of-living crisis

25 January 2023 Consultancy.uk 3 min. read
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One year into an economic crisis which has seen record rates of inflation vastly outstrip increases in earnings to dramatically decrease quality of life in the UK, many employers continue to downplay the importance of the cost-of-living crisis. A new study has found that business owners instead maintain that heavy workloads and long hours are the main causes of stress among their staff.

In January 2022, it was announced that the Consumer Price Index’s 12 month inflation rate had hit 5.5%. Even accounting for the short-comings of that mode of measuring the impact inflation has on low-income households, that was the highest 12-month inflation rate in the National Statistic series since it began in January 1997. The last time it was higher in the wider historically modelled series was March 1992, when it stood at 7.1%.

Looking back, even that seems quaint, however, with inflation having since passed double-digit marks for the first time in four decades. This led to a vast increase in essential shopping, while pay increases failed by some distance to keep pace with inflation, if employers attempted at all. As a result, many consumers have cut back on spending wherever possible – leaving the economy on the brink of recession for the bulk of 2022.

What business owners believe are the five main causes of employee stress

Even essential purchases became impossible to keep up with for many households. As a result, 91% of UK food banks saw a rise in demand, even as 69% were hit by donation slump – because usually they depended on consumers being able to spare some of their groceries to help the needy. Heading into 2023, the economic and social legacies of the last year are clearly visible.

And yet, according to new research from UK speaking bureau, Speakers Corner, the majority of business owners maintain that making ends meet is the last thing worrying their staff. An astonishing 96% of business owners surveyed told the researchers that employers failing to reflect inflation amid the cost-of-living crisis was “not a main cause of stress for their employees”.

Instead, a 26% portion of business owners suggested that staff were most worried about heavy workloads, while 24% said long hours were the top concern, and 22% said tight deadlines were a top stressor of staff. Oddly enough, these factors were very close to the sources of stress business owners said they were most afflicted by. Business owners’ apparent inability to empathise with any concerns which are not their own will likely see the cost-of-living crisis deepen in 2023.

What leaders identify as their own top five stress points

Of 500 respondents from across Britain – each representing companies of more than 100 staff – only 3% said they would take cost-of-living increase into consideration in their employee’s pay reviews. With households facing a further increase in energy costs from April 2023, and food prices rising 17% amid a continued squeeze on low-income families, it seems most employees will be faced with questions of how to do more with even less in the months ahead.

However, owners steadfastly ignoring the impact financial realities have on their workers may be shooting themselves in the foot. As the economy enters recession, leaders who are able to better motivate and energise their staff will have an advantage over those who give the impression they are only out for themselves.

Commenting on the findings, Nick Gold, Managing Director of Speakers Corner, said, “The research shows a chasm between employers and employees. In the face of recession and the knock-on effect it will have for the British economy and productivity, business owners themselves face challenges- including understanding and motivating their teams. This can be difficult as there is a split in perspective; while employers are focussing on ensuring the business survives through the recession over the next few years, their employees struggle with the day-to-day impacts of inflation and rising cost-of living.”