… though it may help in the short term.
In our last blog, we explored how your business could avoid becoming The Great Resignation’s next victim. We focused on how understanding your attrition, and how to stop it, can save you thousands in the long run. This time, our financial focus is a *little* different.
In 2020 a perfect storm began. The realities of Brexit. The global pandemic. A national skills shortage. Within a year this maelstrom of challenges collided, resulting in an exodus branded The Great Reshuffle.
Naturally, businesses reacted. How? By throwing money at the problem.
Amazon made headlines by offering significant bonuses to new starters, much to the outrage of smaller businesses who are struggling to compete in labour-short geographies. But although this move shocked the nation, it’s been a long time coming.
According to ONS data, salaries are estimated to have risen by 3.6% in 2021 across private sector businesses. This falls short of inflation, which currently sits at 4.2%, the highest rise in a decade and has outstripped even the most cynical forecasts. It’s hard to argue against an increase in salaries across the board when faced with the data.
The CBI recently revealed that 44% of businesses intend to increase salaries in line with inflation, while a further 24% intend to go beyond it. This cost is likely to be passed on to the consumer, thus driving inflation up even further.
If we keep throwing money at the issue, we’ll might create more difficulties further down the line.
What do candidates need?
We Are Adam friend and financial advisor, Tamsin Caine, recently took over our blog to share the things candidates should consider before accepting a new role.
Putting the shoe on the other foot, there are many ways you can supplement a basic salary to keep up with your competitors.
· Can you assist potential new employees with a relocation package?
· Do you offer discounted season tickets for public transport or parking?
· Free or heavily subsidised meals can ease financial pressures whilst also encouraging team bonding
· Could you adopt a hybrid solution to reduce fuel costs?
· Have you made employees aware of their tax relief for working from home?
If you are keen to manage cash flow, why not consider a performance-related bonus in addition to basic salary? This could be managed on an individual, team or company-wide level and will only apply if certain criteria are met. Reward goes hand in hand with productivity, something which three quarters of businesses are concerned about following labour shortages.
A great package > A high base salary
This time last year, we conducted a survey on social media, looking at why candidates had turned down job offers in the past. On average, 62% of respondents stated ‘bad vibes’. In stark contrast, only 17.5% of respondents quoted a low salary as being their primary gripe.
Firstly, we would recommend looking at the remuneration package. What do you currently offer that could alleviate the financial pressures of your employees or enrich their lived experiences? Recently we’ve seen some creative examples such as pawternity leave, but the ones that impress us most are more practical such as fertility or menopause leave.
Obviously, flexible working is very desirable (duh!), and perks such as unlimited holidays are particularly popular with digital focused businesses. These things all form part of a remuneration package and can bolster your offering without spending more money so make sure you shout about them.
But package isn’t everything.
There are a plethora of different ways you can keep employees engaged on a £0 budget.
· Create values that really mean something to your people.
· Recognise, recognise, recognise! You’ll be surprised how far it goes, especially when done via a public platform like social media.
· Assign mentors to support and develop your employees.
· Focus on collaboration and connection. Stanford found it lowers fatigue, increases success rates and gets higher engagement levels – a definite win win!
· Clarify goals and responsibilities to keep your company purpose driven.
· Support a charity to unite your team around a special cause.
· Don’t forget to have fun!
Even without a budget, it’s possible to deliver an unrivalled employee experience that goes far beyond a basic salary. In fact, you’ll see gains in productivity and engagement – increasing capacity whilst reducing churn. What will you do with all that extra profit? Invest it back into your people we hope!
There are many conflicting reports circulating regarding salary right now and We Are Adam hope to put that to rest with their Salary Trends report for 2022. Take part in their anonymous survey today to have your say on remuneration in our industry.