Soon, employers of all kinds are going to find out what relationships with their people are really like.

The cost of living crisis — expected to lead to the biggest decline in living standards since the 1950s — means rising pressure on the most basic element of the deal.

More employees will expect their pay and benefits to reflect the spikes in inflation. Employers have to balance their costs and needs. So how much is retention and loyalty worth? As P&O showed with its mass sacking of 800 staff by pre-recorded video, some organisations’ attitudes to the value of their people will become clear for all to see.

Bosses at smaller businesses pre-empted the doubling of household energy bills. That Recruitment Company staff in Birmingham, for example, have been given a permanent, additional 5% pay increase. Firefish Software in Glasgow have been given a £600 pay rise, while London PR firm Comms Co has given everyone a £700 increase. Larger employers — with their own bigger energy and other costs to pay — can’t necessarily do it.

There’s going to be a new urgency to employee attention to pay and conditions. Especially when they see the bigger picture of what’s been happening in terms of inflation and pay increases nationally. According to a YouGov survey by recruitment company Indeed, only 11% of employees earning less than £25,000 have been offered a pay rise since the beginning of the cost of living crisis. At the same time, 20% of those earning £100,000-£149,000 and 23% earning more than £150,000 have been offered an increase. And, when they get a rise, people on the lowest pay get the smallest increases as a percentage; high earners get a bigger percentage.

More scrutiny and more debate over these kinds of numbers is going to be difficult for employer relations. A test of relationships and attitudes on both sides. In general, an environment where dissatisfactions and grievances are stiffened; where fall-outs and clashes take on a more serious aspect.

Whether there’s money available for pay rises or not, HR needs to be thinking about the state of relationships. Problems in workplaces and organisations generally come from disconnection, when employees feel they are not being listened to and acknowledged, when there’s no dialogue. Hybrid and virtual working make the situation even harder to address.

But when there are good conversations between line managers and their reports, between peers, there is trust and understanding — the sense of trust that allows employees to believe their manager and their organisation will do its best for them. It’s the basis for putting immediate concerns into perspective. The quality of workplace conversations is the key:

1. Create more conversations

 Conversations only improve through being a natural and regular part of working lives, not as an event – being summoned to a meeting, or into a weekly team slot. Frequent, open and trusting conversations need to be part of the culture, encouraged and supported through making time. Make sure there are consistent messages about expectations of staff in terms of the value of having open conversations — the benefits of having a ‘clear air’ culture.

2. Get leaders and managers to set an example

People in groups mimic the behaviour of other people. If bosses are tight-lipped and looking only to protect their position, their reports will do the same. So managers need to make sure, for example, that if there’s a problem, they shouldn’t just make it about the staff. It’s usually very easy to see how the other person has contributed to the current difficulties – something they said, or something they did. Harder to spot is our own role. Once we give up the belief that the other person is completely responsible, we can start to see how we’ve added to the confusion and miscommunication. We need more ‘conversational integrity’ among both management and staff – better conversation skills that equip us to be resilient and adaptable, to appreciate the benefits of different views, different people.

3. Help people face up to difficult conversations

It’s not just about avoiding conflict. Challenging conversations are good for business, for encouraging new perspectives and innovation, as a basis for a better working environment, better self-awareness, more positivity and sense of motivation. But particular skills are needed. Too often senior staff believe their experience means they already know the answers, that they are inherently independent. Instead, having better conversations is all based on listening skills, curiosity and empathy. HR also need to ensure, when needed, there is access to professional mediation as an alternative to formal processes.

4. Find ways to balance digital with face-to-face

Digital conversations can be more superficial. Instant but lacking the face-to-face ingredients that encourage rapport, active listening and empathy – like body language and signals of mood. With quick, functional exchanges via digital platforms there are greater chances of miscommunication and misinterpretations. Nuance and subtlety can be lost. Evidence suggests people find video calls draining (from the extra effort demanded for listening and creating a connection) and now the novelty has gone that means conversations that are shorter, more mechanical.