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 financial pinch, the increases in the minimum wage announced, the huge real living wage hike in October last year plus the cost of fuel and food increasing regularly, 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, with their 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.

So, it’s a tricky dilemma. With businesses facing rising costs from the cost of their utilities through to their materials, supplies or deliveries, not to mention the Corporation Tax increase this year, what does the business do in terms of their staff?

Cost of living payments

Many of the clients we are speaking to are looking at non-consolidated bonuses to help their staff. It allows them to give a nice bit of extra cash to help their staff,  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.

Pay rises

Annual pay rises seem to be focused on between 4% to 6.5% meaning individuals are worse off due to the current rate of inflation but as a small business, there are very few who can afford to give 10% plus increases and still be able to function. Surely it is better to have a job?

Not everyone wants a pay rise!

However, what if you have lower paid individuals who need to keep their incomes below a certain threshold, so they don’t 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 items that they need or a day out to treat the family, which is something many mower income families just can’t afford to do anymore. The reward portal may also offer a discount off their weekly shop, better life insurance or a free cinema ticket, this can make a difference without them exceeding their earnings threshold.

The UK government and Bank of England 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 it did before. While this indicator is encouraging, I think we can agree that there is too much uncertainty that we just cannot account for at the moment.

What’s next?

The bottom line is you need to do what’s affordable for your business to ensure you can keep your people happy, productive and keep the business financially sound. Not everything has to cost the earth and we are used to working with SME’s, who don’t have a limitless budget, so we are creative with our ideas and solutions to suit their teams, their culture and their budgets.

Why not book a call with Emma or Rachel to see how we can support your business both now and in the long term? Book a call with us here