Every day we speak to clients that are trying to decide what they can do to attract and retain staff in the current economic crisis. With their employees feeling the pinch, the increase in the minimum wage looming, the huge real living wage hike in October last year plus the fuel price increases, most organisations are trying to find a way forward that is sustainable but will also help their staff.
With a rising cost of living and energy bills, households are strained beyond their limits. Many will face higher borrowing costs, such as mortgage interest or loan rates. Employees will be focused on what is in their pocket in the short term rather than what may happen in the future.
It is a tricky dilemma.
With organisations facing rising costs from utilities through to deliveries, where do they go from here?
Most clients we are speaking to are looking at non-consolidated bonuses to help their staff. It allows them to give a nice bit of cash to help but they do not have to commit to it in the longer term. Findings suggest amounts between £500 to £1000 as a cost of living payment several times a year.
April pay rises seem to be focused on 5 to 6.5% meaning individuals are worse off due to the current rate of inflation but as an organisation, who can afford to give 10/11% increases and still be able to function. Surely it is better to have a job?
However what if you have lower paid individuals who need to keep their incomes below a threshold so they do not lose their benefits from the government? If you give them a lump sum it could mean they are actually worse off than before. Where this is happening some of our clients have become creative with their solutions, using reward portals to allow staff to choose what they need, whether it is a discount off their weekly shop, better life insurance or a free cinema ticket, this can make a difference without them exceeding their threshold.
The UK government and BOE predict a slowdown in demand for goods and services which should have a downward effect on prices. Thus, the cost of living should not rise as rapidly as before. While this indicator is encouraging, I think we can agree that there is too much geopolitical uncertainty that we just cannot account for.
We are here to support you and your organisation both now and in the long term. To find out more contact us.
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Turning Point HR Solutions Ltd are a UK based international reward consultancy, with offices in the UK, Dubai, Lisbon, and Manila. Collectively we provide strategic International HR, Compensation & Benefits advice for both private and public sector companies. We also provide a wide range of inhouse developed software to help our clients with their reward strategies including organisational charting, job evaluation, gender & equal pay audits, and salary benchmarking.