A standard 93% of HR managers are concerned about the economy. It’s really no surprise; inflation, the cost of living crisis, energy price spikes and a recession are all immediate concerns facing businesses.
As employers and employees work to mitigate the impact of this situation, a sensitive approach to the relationship between them is essential. While employers are seeing rising costs, talent shortages and team welfare issues, employees are seeing rising costs of living and a freeze in salary increases.
Ultimately, companies face pressure for pay rises from employees seeking to offset the rising cost of living; yet at the same time, business leaders may be faced with the need to suspend hiring and cut staffing costs. As organizations navigate ongoing uncertainty and unpredictability, business resilience has never been more critical – and HR leaders have a crucial role to play. Here are some levers currently available to HR managers.
1. Closely manage fixed costs
Smart HR and HR managers know that their employees are their greatest asset and therefore their highest cost, but keeping your best talent will pay dividends as they could be the keystones needed to successfully ride out the storm. economic. Also, factor in the cost of rehiring and retraining, and assess whether you can really afford to lose your shining stars to competitors?
If you’re concerned that valuable employees are at risk of being laid off, examine your data to see if you can create a solid business case for retaining them. Any KPIs or productivity statistics could be beneficial here. Likewise, if their demands for a raise are going to drive them away, can you be smart and offer other incentives like a four-day week or training or qualification if there’s pressure on fixed costs?
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Focus on productivity — make sure you pay for performance — and look for ways to increase employee productivity in a sustainable way.
2. Increase Total Compensation Through Variable Cost Incentives
During economic turmoil, companies often freeze salary increases, but employees will look for ways to increase their income. Use bonuses, stock grants, and other incentives to offset lower base salaries and offer gift cards or equivalent (company-branded items, especially apparel) to help maintain motivation.
Be open and transparent about pay and benefits, communicating how the grading system works and how salary levels and salary increases are decided. If employees understand what is happening at the top, they are more likely to react better than if they feel kept in the dark.
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Don’t forget to remind employees of existing benefits offered by your company – bike to work programs, for example, can offset the high cost of gas – childcare vouchers and any discount platforms to which your organization is registered that offer discounted consumer goods.
Finally, consider wellness incentives, offer additional paid time off, and remember that recognition and rewards are additional ways to recognize your staff’s successes.
3. Offer flexibility as a financial incentive
You might feel like your hands are tied if the company has put a damper on costs and financial incentives, but think outside the box and remember that flexibility is a strong bargaining chip for most businesses. employees.
A shorter workweek — condensing someone’s hours into four days, for example — or offering an employee the option to work part-time might hold a lot of weight with some employees. Similarly, unpaid sabbaticals can be the perfect motivation for an employee considering travel or taking unpaid leave.
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Although remote working and hybrid working seem to be the norm, maybe your company doesn’t offer it as freely as it could? Investigate to see if there is even more flexibility in how employees work that could be offered as an incentive.
4. Personalize employee experiences
Paying attention to how employees are affected by large increases in inflation, food and fuel prices allows HR to understand sentiment across the organization. You can then decide whether action needs to be taken at an organizational level or at a group or individual level to reduce stress and maintain employee motivation, engagement and productivity.
In fact, each employee may need to be managed slightly differently when it comes to the stress they’re under, to keep them motivated and engaged, so creating personalized and tailored employee experiences is a smart move.
Encourage leaders to adjust management styles and deploy situational leadership as needed to suit individuals and teams or squads, and communicate early and often. Being open and transparent in discussions about company performance will make employees feel valued.
Giving employees more decision-making autonomy where possible and creating a culture of listening so you can act on feedback and communicate needed actions or suggestions are all ways to drive personalized experiences for employees. employees.
Also consider offering stretch assignments, growth opportunities, and meaningful, meaningful work, as well as automating low-value or boring work.
5. Implement a financial wellness policy
Having a financial wellness policy that fits into your larger wellness strategy will show your organization’s commitment to supporting employees with any money worries and concerns they may have. It can be as simple as pointing your employees to independent money and debt advice, making sure your staff is aware of all the benefits you currently offer, and normalizing conversations about money worries at work.
Read more: Employees want financial well-being more than they want PTO
Helping your employees know where they can access free, confidential and independent financial advice could help some of them plan, save and make better long-term decisions.
Consider ways in which your own organization can increase financial support for staff. Some employers are considering commuter grants, hardship loans, pension maintenance assistance and insurance contributions and advice.
Better prepared and ready to shift priorities
If 2020 has taught us anything, it’s how to manage uncertainty in an ever-changing landscape. HR leaders have risen to the challenge and successfully navigated their organizations through the pandemic, proving their ability to be leaders of change. In fact, 72% of HR leaders recently told us Sage Research that the global pandemic has helped them demonstrate their worth and better understand the role of HR. New smart ways of working, adaptability, flexibility and business resilience are just some of the positives that have emerged over the past two years as businesses innovate to adapt to the new normal.
The current economic downturn is no different — it offers HR and business leaders the opportunity to continue innovating and making positive change. Some might look to take bold, strategic steps, while others might step back and focus on simple, cost-effective solutions. Whichever camp you are on, sitting still is not an option. Agility to change is crucial and HR is perfectly positioned to lead the charge again.
Coupled with an agile and flexible cloud HR platform, you can enable fast, data-driven decision-making, easily personalize employee experiences for individuals and teams, and support changing global policies and local compliance. Being prepared is always a smart move in times of uncertainty. That is certain.