Inflation at 13%. The Cost of Living Crisis.
Bank of England puts borrowing costs up. The Cost of Living Crisis.
Energy cap up to £4,266.The Cost of Living Crisis.
The Cost of Living Crisis comes with significant non-financial challenges for firms.
Employees: We are operating in the tightest labour market for years. Will well-qualified, skilled employees sit tight while their pay is stagnant? Not if they can move and increase pay. Will employees resort to strike action if their employer doesn’t move on pay? Perhaps. Certainly likelier than it was.
Will employers act to bolster the remuneration at the bottom of the scale? Some are doing so.
The Cost of Living Crisis changes the terms of trade for Executive Pay Rises. Company boards have set top pay increases far in excess of those for the average worker. How will this look if households cannot afford to keep the gas on and the highest paid have just received a significant cut in their taxes?
Small suppliers and small businesses are normally more popular than the big businesses. We can expect a barrage of stories about how they are not being helped by corporates’ reaction to the crisis. A media dispute between the family farmer and the smooth PR-man from the supermarket chain? We know who is going to win. So tread carefully and act fairly.
Corporate Tax cuts are on the agenda. Never popular with the public. Companies would be wise to have a story ready about how theirs will be being put to good use. The merest whiff that shareholders and senior managers are making off with the bunce and…(need I say more?).
Can companies (particularly consumer-facing ones) fashion a strategy that shows them to be on the side of the hard-pressed?
Maybe.
Many companies stood up to the plate during COVID. They recognised the emergency. They adapted their Community programmes to meet the need.
Hungry families. Empty food banks. Freezing pensioners. Queueing ambulances. Sharp rises in mental ill-health. We are told these are just round the corner.
A big bonus then for corporates who stand beside those in need. Companies who help people and communities get through.