Ways HR leaders support employees through economic uncertainty 

Brexit, the pandemic and the cost-of-living crisis have shown how quickly the economic picture can change. Although inflation has eased since its 2022 peak, many households are still feeling the effects of higher prices for essentials such as food, energy and housing. For employers, the challenge is how to support staff through uncertain times while keeping the people they need.

How economic uncertainty affects a business

When money is tight, more employees face difficult choices, and some may struggle to pay their rent or mortgage. Financial worry rarely stays at home. It can affect concentration, performance and attendance, and it can lead to more absence or to presenteeism, where people come to work when they are unwell and unable to work effectively.

Clear, consistent policies help managers respond to these issues fairly. Our employment solicitors advise on managing sickness absence and performance management, both of which can become more pressing when staff are under financial strain.

Since 6 April 2026, Statutory Sick Pay has been payable from the first day of sickness, and the lower earnings limit has been removed. The rate is £123.25 a week, or 80% of normal weekly earnings if that is lower. This may reduce the pressure on lower-paid staff to come to work when they are ill, and employers should make sure their sickness absence policies and payroll reflect the change.

Second jobs and working time

Some employees take on a second job to make ends meet. There is no general legal ban on this, although an employment contract may restrict it. Exclusivity clauses cannot be enforced against zero-hours workers or against workers whose weekly earnings are at or below the lower earnings limit for National Insurance.

A second job can still affect performance and wellbeing, especially if the total hours are long. Under the Working Time Regulations 1998, a worker should not work more than 48 hours a week on average, normally measured over 17 weeks. Government guidance is that where someone has more than one job, their combined hours should not exceed that average.

A worker can choose to opt out of the 48-hour limit. The opt-out must be voluntary and in writing, the employer must keep a record of it, and the worker can cancel it by giving notice.

Employers must not pressure staff to sign one or treat them unfairly for refusing. It is sensible to ask employees to tell you about other work so you can manage hours, rest breaks and wellbeing properly.

Ways HR teams can support employees

1. Review pay and reward

Pay rises remain one of the most direct ways to help staff and to keep them. Not every business can afford them, but a review of pay structures, bonus schemes and pay progression can show where money will make the biggest difference. Make sure every worker is paid at least the National Minimum Wage or National Living Wage for their age.

2. Offer flexibility

Flexibility over hours and location is highly valued, and it can help employees manage childcare and travel costs. Since 6 April 2024, employees have had the right to request flexible working from their first day in a job.

They can make two requests in any 12-month period, the employer must make a decision within two months (including any appeal) and must consult the employee before refusing. Further changes to flexible working under the Employment Rights Act 2025 are expected in 2027.

Our article on the benefits of flexible working hours looks at how flexibility can support productivity as well as wellbeing.

3. Look again at your benefits package

Benefits beyond salary and pension can help employees stretch their money further. Options include:

• workplace savings schemes and access to financial education or guidance
• employee assistance programmes offering confidential counselling
• discounts with local and national retailers
• salary sacrifice schemes, for example for bicycles, technology or additional pension contributions

Salary sacrifice changes the employee’s contract, so it needs their agreement, and it must not take their cash pay below the National Minimum Wage.

Our article on how employers can help relieve the strain of the cost-of-living crisis has more practical ideas.

Communicate openly and build trust

Employees cope better with uncertainty when they understand what is happening. Be honest about the position of the business, explain what support is available and make it easy for people to ask for help without feeling judged. Train managers to spot signs of financial stress and to point staff towards support.

If economic pressures mean you are considering changes to pay, hours or staffing, take advice before you act. Our employment law advice for employers can help you plan changes that are fair and lawful.

To talk through how to support your staff, book a free 30-minute consultation with our employment solicitors or call 0141 471 9166.