The COVID-19 pandemic has posed many challenges for employers, one of which is a labor shortage. The high turnover during this time has become known as the Great Resignation or the Turnover Tsunami. The difficulty of maintaining competitive salaries has made hiring and retention a struggle, especially with today’s inflation.
Inflation has surged 7.5% and is at a 40-year high. Naturally, employers are concerned. In fact, according to Payscale’s 2022 Compensation Best Practices Report, 85% of organizations surveyed expressed concerns about rising inflation eroding the value of pay increases; 44% of organizations plan to give pay increases higher than 3% this year. However, planned pay raises are unlikely to keep up with inflation because the real value of wages is on a steep decline. So, what should you do?
Get creative. While an easy or straightforward approach may be obvious—increase employees' pay—that may not always be feasible based on budget constraints. However, a recent survey showed some employers are offering other enticing benefits like remote work options, work-from-home stipends, flextime options, and mental health or total wellness programs.
Enhance employee trust by creating pay transparency. Transparency can go a long way toward attracting and retaining employees. Clarify with employees and applicants the factors that go into determining salary ranges, starting salaries, raises and bonuses. Have an initiative that focuses on pay equity and communicate this with employees.
Focus on the overall employee experience. Employees are looking for more than just a steady paycheck. Work that is meaningful and appreciated is an important aspect of employee satisfaction. Work that is respected and proves to be challenging is similarly valuable. Help your employees connect the dots between their daily duties and the organization's goals and results. Give them challenging work and treat them as professionals.
If you want to know more about pay equity and inflation or have other HR questions, we’d love to help! Give us a call or send an e-mail. We’re also available to chat. It’s one of the most valued benefits of SHRM membership!
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