Welcome back to the final part of our series examining how to futureproof your business. In part one and part two we investigated how companies can tackle the concerns around rising fuel costs, and rising costs of living. For our final instalment in this series, we are looking at how employers can cope with the rise in salaries, which in many cases are needed to help their employees stay out of poverty in these difficult times.
The ‘doom’ of the rise in salaries
With National Insurance contributions going up, a council tax rise, increasing inflation, energy bills skyrocketing and a cost-of-living crisis pushing up the prices of every-day essentials, many people need a reasonable pay rise to cushion the blow. The resulting rise in salaries is making it harder for employers to find and retain the right talent.
CV-Library recently surveyed more than 4,000 workers and found that 75% stated they are considering a new job due to rising costs. Of the survey respondents, 69% declared that salary is the main factor when considering a new role.
As three in every four workers in the UK are considering changing jobs due to the cost-of-living crisis, and there are widespread labour shortages in sectors ranging from hospitality to health, many people see now as the ideal time to take advantage of the situation and move to a better role.
A recent YouGov poll found that of the 40% of people who asked their employer for a pay rise, just over a quarter succeeded. Unfortunately, just one in every five women who ask for a pay rise have success, compared with just under a third of men, which is one of the factors contributing to the continuing gender pay gap.
The Resolution Foundation Think Tank recently published a report, showing that each year the average UK household is typically £8,800 worse off than its counterpart in five comparable countries – Australia, Canada, France, Germany, and the Netherlands.
For employers, there are risks with paying the higher salaries needed to secure new talent, as existing employees may begin to feel undervalued in comparison. That could naturally lead to losing more staff. It’s an important time to review the offer you have in place for your employees. What benefits and rewards do you offer? Do they stand up against the way your competitors treat their staff?
What opportunities does this create?
As a lot of people are now looking to improve their current situation, this could be a great time to find some new talent for your business, perhaps people that wouldn’t previously have been so interested in switching to a new role or a new organisation. You can choose to revaluate what your business has on offer to attract talent and look at your recruitment options.
Futureproof your business against the rise in salaries
The 2022 UK Salary Guide examined in-work poverty and found that the UK’s top companies are failing to address the issue. Most FTSE 100 firms failed to mention the issue at all in their end-of-year reports last year. That’s a real shame, because reputation is everything, and employers who gain a reputation as turning a blind eye to the problem, won’t attract or retain good employees. Poverty among employees is a fundamental issue which simply cannot be ignored. Stakeholders, and investors are equally likely to turn away from organisations that overlook the problem.
So, what can you do? A natural starting point is to become accredited as a Living Wage employer. That’s if you haven’t done so already. According to The Living Wage Foundation, 93% of all employers that have gained accreditation, benefitted from doing so, 86% reported that it enhanced their general reputation, and 80% saw an increase in the quality of work their employees produced.
Almost half of SMEs have not raised wages in line with inflation. The results of The Bank of England business survey, released in May, showed employers surveyed were not planning an acceleration in pay rates, but the UK’s cost of living crisis is continuing to deepen. Many employers have taken care of their own organisational needs relating to inflation but have not helped their employees with the same. If you’re not able to raise salaries, or can only offer small increases, consider improving the employee benefits package you offer. There are tips on how to do so here.
If you’re keen to retain the talented staff you employ, consider asking for their input on the employee benefits you offer, and what you might offer in future. Some employers are missing out because they are misaligned with benefits that employees value most. Ask your staff what they’d like to see, and what they value the most. You may find they appreciate being included and are impressed by your transparency.
Consider using bonuses or one-off payments to alleviate the financial pressure on your employees. This is a tactic which could support your staff through the worst of the inflationary period, without you committing to permanent wage increases.
The time is now
The UK’s job market is wide open right now, with many organisations crying out for more candidates to fill their vacancies. This is the time to review your priorities where this is concerned. Careful planning and strategic recruitment are crucial for businesses to succeed. Perhaps most importantly, developing a company culture and reputation where your employees feel valued, appreciated, and supported through these tough times, can make all the difference to your retention of top talent, and your overall profitability.
Let us help
Are you finding it difficult to source, retain, and motivate the right talent for your business? Talento specialises in the recruitment and professional development of exceptional Operations and Management talent. The operational spine of every successful manufacturing business is supported by talented people. Partner with Talento, so you can get on with running your company, without the headache of sourcing the best people. If you’re undertaking a review of your recruitment and retention needs, let us help you. Contact us Today.