Working from home and the rising cost of living

As Australia grapples with a cost-of-living crisis, countless individuals and businesses are looking for ways to save money and keep their finances on track. Amid the soaring prices, working from home is one strategy that can be used in a bid to lower costs.

It's little wonder Aussies are scrambling for solutions. Official figures from the Australian Bureau of Statistics (ABS) show that living costs are the highest they have ever been, and remain above the current rate of inflation.

Over the past year all living cost indices have risen between 7.1% and 9.6% for all households, compared to a 7% annual increase in inflation, as per official data.

Stubbornly, high inflation is having an impact all across the country, but its effect is uneven. Industries feeling the most pressure include construction, food and accommodation, and transportation and warehousing.

There are several factors contributing, with food, housing and mortgage interest charges seeing some of the biggest recent price rises. In particular, households have logged a big lift in mortgage interest charges in the past year due to hikes to home loan interest rates.

But it's not just mortgages fuelling the squeeze. Recent data shows broad-based factors driving higher costs for households in a majority of areas. Indeed, prices have only fallen in a few categories like for clothing and footwear, and household equipment and services.

Whether prices will keep going up remains unclear. The RBA states inflation is expected to decline to near its 2-3% target range over coming years, but warns it could be more persistent if productivity growth remains weak or if rents increase by more than expected.

On the other hand, the central bank says that if the price of goods doesn't rise as fast or widespread as predicted, inflation will turn out lower than expected.

Rising cost of living and its impact on employers

The surging cost of living is impacting employers in many ways. The number of businesses in administration has lifted 35% year-on-year, according to CreditorWatch, indicating many more Australian companies are being pushed to the wall as the RBA fights to curb inflation.

What's more is that businesses are being hit by the financial stress being experienced by their employees. This is leading to a drop in the quality of work and lower productivity. For instance, AMP's latest Financial Wellness research shows the number of workers severely stressed about their finances is at record highs, having more than doubled since 2020.

The research estimates that, in total, financial stress is costing businesses around $66.8 billion due to employee distraction, lost motivation and dented productivity. It cites future concerns with cost-of-living pressures as a key driver behind the escalating financial fallout.

Increased office overheads - another consequence of inflation - are also hitting businesses. Overheads, the indirect costs associated with the day-to-day operations of a business, include fixed costs, such as rent and mortgage, and recurring expenses, like administrative and marketing fees. Among these factors, rent increases are a big factor at the moment.

As recent research from Cushman & Wakefield bears out, office rents are pushing higher in many major markets like Sydney, Brisbane, Adelaide and Perth on the back of steady tenant demand and the impact of inflation. Sydney is the most overheated office rental market, as per the research, with some rents rising from $930 to $960 per square metre this year.

Employees jumping ship to other jobs for better pay is another trend employers are dealing with amid the rising cost of living. As UNSW points out, a recent ABS survey showed a large uptick in the workers switching jobs, from 7.5% to 9.5% - a reversal of the usual trend.

Ways for employers to offset rising costs

Businesses experiencing higher costs can also look to cut where they can. For instance, if a business has a hybrid work policy it may allow them to downsize office space and save on power, heating, rent and overheads - even cleaning services may possibly be wound back.

Other ideas include offering telework to reduce overheads, cutting back staff hours or even considering talent loaning, which can provide qualified people without the traditional lengthy recruitment process.

Don't forget employee education can also help curb costs. This includes lessons on sustainable printing practices - whether they are WFH or in the office - with things like double-sided printing, printing in smaller fonts, and only printing what's necessary.

Ways for employers to support employees

Understanding the direct impact that cost of living can have on a business, it makes sense for employers to support staff with easy access to employee assistance programs, mental health resources, and financial wellbeing help.

Offering access to mental health support via employee assistance programs can be one of the best ways to ensure impacted staff can get the help they need, especially with financial stress adding to the already heavy load on mental health services nationwide.

According to Australian recruiter Robert Half, many employers are taking the opportunity to step up to the plate by recognising that many of their employees are struggling to keep up with the pressures of inflation and the rising cost of living.

Facilitating remote work (57%), providing mental wellbeing assistance (55%) and boosting salaries (53%) are among the most popular ways employers say they are helping employees, with medium-sized businesses doing the most to help out, the research found.

However, it also found 11% of employers believed their organisation was not taking steps to support employees with the rising costs of living.

Beyond these measures, employers may also help out by offering a discount program for everyday household essentials like petrol, groceries, and fitness. Some employers are said to be giving out free meals and snacks to ease the burden on workers, while others have reportedly set up hardship funds to support staff finding it increasingly difficult to pay bills.

Employers can also consider offering financial education seminars on debt management to help employees understand how to manage and pay off loans, and what help is available in the company and beyond from government and not-for-profits.

Irrespective of the strategies deployed, Dorothy McDonald, Head of People & Culture at Brother International Australia, says it's critical to make it clear to your employees what assistance is available.

"The beating heart of any organisation are its employees. It's therefore vital that we not only show our support but give them tangible resources to access, especially in times like this where cost-of-living pressures are mounting. Make sure that all your workers are fully informed as to what assistance is available to them and guide them through these processes."

How are employees affected by the cost-of-living crisis?

There are serious signs many employees are increasingly stressed due to increases in the cost of living, which is outpacing rises in wages and salaries. This means, even workers who are getting pay rises may actually be going backwards at the end of the day.

Looking closer, the extra pressure is having a number of stress impacts, as per recent media reports revealing that almost half of Australian workers are feeling overwhelmed by debt.

And it's little wonder. Industry research released this year has shown that, as many household budgets are pushed to the limit, millions of Aussies are being forced into taking on more work to make ends meet.

The survey, by comparison site Finder, showed one in four people, the equivalent of a staggering 4.8 million workers, have taken on an extra job, are working longer hours or in the case of seniors are coming out of retirement in an effort to boost their income.

It mirrors findings from overseas. For instance, in the UK where cost of living has also become a key concern amid stubbornly high inflation, the latest Chartered Management Institute (CMI) survey of over 1,000 managers and team leaders found a similar outcome.

Some 71% had seen evidence of the crisis increasing general stress and anxiety for their teams. Those polled also highlighted "more distraction, less focus and attention to detail" (41%), increased sick leave or absence (33%) and a reluctance to take on extra work (31%).

Working from home to ease cost pressures

Although there's no silver bullet to ease cost-of-living pressures, remote or hybrid working can be a great way to reduce travel costs and cut down on related expenses like eating out and petrol.

If it's feasible within your profession, it might be worth talking to your employer about working from home, whether that's full-time or just a couple of days per week. You'll be joining a growing number of Aussies going remote.

According to the Australian Industry Group, nearly half (46%) of all Australian employees now work from home to some degree, while 34% of businesses use teleworking for at least a portion of their workforce.

In terms of potential savings, the upside is clear. Remote workers save around $10,000 a year compared to those who commute to an office, as per global technology firm Cisco.

That study of 28,000 full-time workers, including 1,042 Australians, found 80% of workers saved money while working from home. On average, they saved $216 a week as they wound back spending on items like petrol, commuting, food and entertainment. A big chunk of the savings is from lower travel costs, especially on long road commutes with fuel and tolls.

It's also important to ensure that you understand the tax deductibility of your home office space. Unless you have had all your tools provided to you by your employer, you may be able to claim back precious dollars on technology that you've had to purchase yourself like a home office printer. In addition to hardware, you may even be able to claim occupancy and running expenses.

Once you understand your eligibility for certain claims, make sure that you keep a careful record of the incurred expenses in order to streamline the process and maximise your return come tax time.

If you're already working from home, it's a good idea to think about potential home office cost savings. For instance, think about the ways to save power and money in your home office by using (if you're not already) LED lights or low-power settings on your technology.

As power prices surge, also keep an eye out to see if switching to a cheaper utilities provider will save some money on home office running costs - there are lots of comparison sites that can help steer you in the right direction.

And don't forget to shop around for the best prices and deals on home office equipment. Brother's DCP-J1200W XL is a multi-function printer that's the perfect addition to any home office. This printer comes with multiple connectivity options, making printing and scanning tasks convenient and simple, plus it comes with up to 2 years of ink included in the box.

By taking some key steps, including considering whether remote working is right for you, both employees and businesses can find ways to help navigate today's cost-of-living crisis.