As we enter the post-pandemic world through 2022, compensation management remains top of mind for employers. Demands for higher wages are evident in our current economy and the job market.
However, even if wages go up in 2022, inflation is expected to also rise and will likely mean any modest increase in wages likely still won’t keep up. Be encouraged, though, because thankfully, even in this tumultuous economy with its many challenges brought on by the great resignation, the great reshuffle and inflation, there are still steps you can take as an employer to keep up with your employees’ demands and win this war on wages. To begin the process, though, it’s important to understand what is happening in today’s job market. Read on to learn more:
The Great Resignation
This phenomenon doesn’t have any data backing as yet, but it is obvious that it is taking place. This trend shows workers in larger and larger numbers reevaluating their current priorities. This has led many to wonder if they are better off doing something else to make money or simply decide it’s best to reprioritize their living standards and aim to live on less. Other workers who are close to retirement age, have gone ahead and retired early. Still others have decided to change up what they are doing as well. Some have gone back to school for more training, others have started their own businesses. The media has termed this mass exodus due to the reprioritization of The Great Resignation.
The Great Reshuffle
Another interesting side effect of pandemic changes means many workers are switching jobs. After all, there is no better time in terms of job availability to try something new. The Bureau of Labor and Statistics said there are currently more hires than separations and more job openings than hires, especially when compared to numbers from previous years. This means that now, perhaps more than ever before, people who want to find a different way to make a living have a great opportunity. Of course, this has negatively affected organizations that are struggling to both attract and then retain talented employees. This trend has been termed The Great Reshuffle.
The Issue of Inflation
As of October 2021, inflation was reported to be 6.2%. This represents the highest increase that our country has experienced in over 30 years. This means that the typical standard of living raise, which is only 3%, is not enough to overcome the increase in the cost of living.
Going Beyond Pay: Non-Cash Benefits That Matter to Employees
Thankfully, since pay is a tough issue to address in our current state, where inflation is going up and up exponentially, it’s a good idea to promote employee loyalty and to attract new talent with other non-cash benefits in addition to maintaining competitive pay. These non-pay incentives could include employee benefits packages, which contain basic benefits, like insurance but could also include gym memberships, vacation benefits, and more. It’s also important in the ultra-competitive market to allow your employees flexible work hours, meaning they can work from home or alternative hours varying from the typical 40-hour work-week.
Finally, make sure that your employees have plenty of opportunities for development and training. U.S. Bureau of Labor Statistics found that 94% of employees claim they would stay at their current employer if their place of employment invested in their long-term training. Employees want to be trained and have opportunities for advancement within any company.
There is a War on Wages Taking Place in America, You Must Fight Back to Stay Competitive
If your organization is resisting pay increases in amounts high enough to retain your current staff because you think it’s simply too expensive, you need to consider the ramifications. The cost to replace your current workforce might be more costly overall. Need help finding the right balance and solution to this issue for your business? Reach out to TPC's team of experts today to see how we can help.