Brand Preview 2023: How can you help?

A recession is a challenging situation for a company. But it’s also a challenging situation for the people who work for that company, and the people who live in that community. So as a business, in this current climate, there’s an opportunity to consider, how can you help?

The pressure on UK households is unprecedented. The 2022 ended with Inflation over 10%. Foodbanks distributed a third more food parcels last year (compared to 2021), with food prices rising by 12%. Energy bills rose by over 70%, with more on the way this year. But these rising costs are increasing the pressure on businesses too, leaving many struggling to raise wages in line with inflation.

The pandemic changed many things. One example is the attitude towards the role of a company, and the relationship between a company, its staff and its community. Pre-pandemic, companies were seen as commercial entities, whose purpose was to generate revenue. Now there is a growing expectation, that in addition to their commercial role, companies have a broader “social” role, an obligation to consider the wellbeing of their staff and the community where they are based.

However, the cost of living crisis has created a different situation. The challenge for staff (and their employers) this year (as it was for much of 2022) is not simply addressing the issue of work-life balance and the new ways of working that the pandemic triggered. It’s tackling the very tangible and practical problem of rising living costs, as the price of food, energy, mortgages and fuel increases.

This new “social” role for business isn’t universally recognised, or accepted. But there are indications that the situation is changing. It seems likely that the scale and severity of the cost of living crisis will accelerate this. Research indicates that 55% of people believe businesses are best placed to take a leadership role, when it comes to solving societal problems. The cost of living crisis provides an opportunity for companies to demonstrate this.

How you approach this issue within your business will be crucial to your company culture over the next 12 months. Only 24% of staff think that their employer genuinely cares about their financial wellbeing, at a time when 61% of employees are finding their bills and credit commitments a burden.

Some companies have demonstrated their support by offering one-off payments to staff. Five per cent of large businesses, including Nationwide, Lloyds Bank, Santander and Rolls Royce, have given staff a cost-of-living payment. But it’s not just large businesses that are taking action. SMEs are finding opportunities to offer support too, even if it is just providing a hot meal for staff at lunchtime.

The ability of companies to retain their staff could depend on how they respond to the cost of living crisis.

This is reflected in research which found that 63% of employees would leave their current job, in order to find an opportunity that provides better financial support. But there’s also a potential impact on staff performance, with over a quarter of employees (27%) saying that money worries have affected their ability to do their job.

Other organisations are launching initiatives to help their communities. As energy prices rise, and household income drops, many libraries and museums have established themselves as “warm hubs”. These warm hubs are locations where the heating will be on and people can stay warm, when they may be struggling to heat their own home. Companies that have suitable space may be able to make a similar commitment.

There is evidence that an increasing number of companies are taking the opportunity to bring a positive change to society. The number of certified B Corps in the UK almost double in 2020, rising from 564 to over 1,000 by the end of the year. B Corp Certification is a designation that a business is meeting high standards of social and environmental impact. It’s a clear and increasingly well-recognised commitment.

Helping out - taking care of your staff and your community - is unlikely to bring a commercial benefit. It might improve staff (and customer) retention and it may help recruitment. And it will certainly provide PR opportunities. But these need to be handled sensitively. Any activity to offer support needs to be seen as a genuine desire to make a difference, not a thinly veiled marketing campaign to drive sales.

Although taking the opportunity to provide assistance may not increase revenue, it does have the potential to change - or at least influence - perceptions of your company. Demonstrating a social purpose - a desire to make a positive impact on society - is an opportunity to influence what people think, and an opportunity to demonstrate the values that you want people to associate with your business.

This may not bring (immediate) financial reward, but it is an opportunity to differentiate your company from your rivals and create a competitive advantage. In an economic environment where people - customers, staff, investors, suppliers - are increasingly cautious about their commitment, that advantage could be very valuable.