As the cost of working increases worldwide, how can UK companies respond?

With the costs of working on the rise, companies face important decisions on how to respond. Capterra examines how employee expenses for attending work in the UK compare to other countries around the world and what employers can do to meet associated challenges head-on.

As seen in our first report on Capterra’s 2024 Cost of Work Survey, employees across the UK have seen their spending on work-related costs increase over the last year. Employees who have seen a return to the office were particularly feeling the impact of travel costs to an onsite workplace.

In these times, having a clear idea about the state of employee expenses when implementing new policies like a return to the office can be even more important to give employees the right levels of support and keep motivation stable. This might be applied through benefits that reduce costs or through policies that can reduce the strain on employee finances for attending work. 

In this article, we consider where the UK fits into the global picture amongst employees and where these pressures affect UK staff the most. We’ll analyse feedback from 2,716 employees from 11 countries, including 248 UK respondents, to examine if the same patterns apply amongst international peers. 

For our full methodology, scroll to the end of the article.

69% of UK employees have seen increased costs to work 

The cost of living crisis is having an effect on many areas of day-to-day life, including work. Most countries surveyed have seen a rise in the costs related to work, such as transportation, energy, eating out, and petrol. In total, 60% of all respondents we surveyed globally say they have seen a rise in expenses in the last 12 months. Only Spain and Japan have a majority of respondents who say that costs have stayed the same or decreased rather than risen.

It was also common for employees worldwide to have seen their salaries fail to keep up with the additional increased cost, as 63% globally say their pay has not kept pace with the increases. This was true for almost all the countries surveyed, the only exceptions where the majority say salaries have actually kept pace with rising costs were Mexico and Spain.   

However, the UK proved to be one of the countries most affected by increased costs of working. We observed in our data that the United Kingdom is one of the five countries with the highest proportion of respondents experiencing these pressures, as the graph below demonstrates.

The UK is also one of the countries where more employees are likely to say their pay hadn’t risen fast enough to meet the higher costs of work. Most UK respondents (68%) have seen costs rise faster than their salaries, with only France (79%) Italy (75%), Australia (71%), and Canada (70%) seeing a greater proportion of people with salaries that aren’t keeping up with the cost of living.

Utilities and groceries are major cost rises that employees can’t avoid

Worldwide, the costs that are increasing for most workers tend to reflect general expenses such as groceries, and utilities, which might affect people who work from home more acutely. However, costs incurred from onsite work attendance, such as eating out, petrol, and clothing, are also among the highest.

Many of the costs that have increased for employees noted above are the same as those selected exclusively by our UK sample. However, we observe 62% of our UK respondents experiencing a jump in car insurance prices making it one of the top areas of cost increases. This is compared with a global average in our study of 38%. 

Additionally, workers in the UK report the highest rises in grocery and utility costs compared with other countries surveyed. In our UK sample, 95% say they have experienced an increase in their food shopping expenses compared to a global average of 83%, whilst 85% said their utilities had risen compared with a global average of 70%.   

This goes some way to explaining why the UK ranks so high in terms of salary not keeping pace with costs to work overall. Groceries and utilities are additional expenditures that employees must pay regardless of whether they work from home or an office and are likely to affect all staff similarly.

Workers are returning to the office, but many aren’t happy about it 

As seen in our last report, staff in the UK who attend an onsite workplace face many costs associated with transportation to their job. This could impact the acceptance of onsite workplace requirements amongst staff. We examined how changes to workplace policies have affected this sentiment among workers.

First of all, we found that most employees internationally have stability in terms of workplace policies. A global average of 73% of hybrid or onsite employees say they are required to work the same amount of days onsite as they were 12 months ago. The UK, in fact, slightly exceeds this average with 75% of surveyed staff following a consistent workplace pattern over the last year.

We can also see that most staff globally have gone back to a workplace in some capacity, with only 14% working fully remotely, 37% working in hybrid conditions, and 45% working fully on site. However, this appears to be an unpopular move: 57% of global respondents who have been required to work more days onsite over the past 12 months express negativity about this obligation. 

Nevertheless, the UK appears to be significantly below the average on this topic. The country, in fact, has among the lowest levels of negativity about onsite work requirements (the third lowest overall) for those required to travel in more, with only 46% feeling negative about the changes. However, this still represents a high proportion, as only 22% in the UK feel positive about the change and all others are simply neutral on the topic.

There are many possible reasons employees in the UK are less negative than global peers about spending more days onsite. They may feel motivated by factors such as professional development, or simply prefer the variation of both styles of work (if working hybrid), as well as the chance to socialise more with colleagues.  

Are employees weathering higher utility costs by going to the office? 

Additionally, another factor that might influence lower levels of apathy amongst UK participants towards a return to office trend may be the high cost of utilities in the country. Prices have risen for many workers, with 85% of UK employees in our sample having seen their utility prices rise over the last 12 months.

The broad rises in energy bills and the fact that the data for this survey was collected just after winter when costs for heating and electricity are likely to affect UK residents most, could have also driven the relative comfort in attending a workplace. This could suggest that an important return to office incentive may be that employees can avoid some of the highest costs in their day-to-day lives. 

This is, of course, not the only incentive that companies provide in return for more days working from an office or a full return to office mandate, as we will explore later. 

Despite this, there is still a significant proportion of staff, even in the UK, who feel negatively about company policies obliging them to work onsite more. This is a factor that managers looking to increase office attendance should take into account when considering how best to proceed.

Food and flexibility make employees more positive about returning to the office  

Whilst onsite workplace requirements may assist staff expense management in terms of the costs of heating, food also plays a major part in their decision-making. We saw in our data before that grocery costs have risen around the world, but particularly in the UK. This trend seems to influence the in-office perks that workers want the most when attending a workplace.

According to onsite and hybrid workers in our study, food could motivate them to come to the office more. Most employees worldwide (76%) who attend an office at least some of the time say they would enjoy working onsite more if free or subsidized food was available. Amongst UK staff this preference is even higher, with 79% saying they would enjoy attending a workplace more if this was provided.

Flexibility was also a major incentive for staff across the countries surveyed. For UK in-office and hybrid employees this actually stood just above the global average at 71%. Given that many workplaces have already embraced hybrid working practices, it can help to afford the same flexibility to start times and end times when in-office attendance is required. 

Using flexible policies such as these can support employee financial and personal wellbeing in a couple of ways. Firstly, it can make a trip to the office seem less confining and rigid. It can also allow some employees to save time, and potentially money too, by being able to avoid rush hour peak times when public transport fares are sometimes more expensive and roads and rail are most crowded.

Factors for business to consider for onsite employees

Costs of working have risen for employees around the world, particularly for UK employees. This is a fact and needs to be taken into account for workplace policies during the design phase to create the right incentives for onsite work.

Creating an onsite policy around factors that are likely to help save employees money and avoid imposing additional costs on their side offers a solution in this regard. Based on the findings of the 2024 Cost of Work Survey there are a number of ways UK employers can confront the current high expenditures for workers.

1. Reassess employee salaries and employee benefits to ensure they can cover some of the higher costs of living. 
2. Provide flexible working incentives to allow staff to find savings in terms of cost and time.
3. Subsidised or free food is a simple but effective way to encourage attendance onsite.