Do you have an action plan for bridging the salary gap?
Many employers will respond to the cost-of-living crisis with a predicted 5% wage hike during 2023. Unfortunately, this won’t make wages inflation-proof. And further pay rises won’t be financially sustainable for many organisations either.
But there are plenty of non-pay-based options that employers can use to try to bridge the gap between salaries and rising costs. These options need to be framed within the context of a coherent plan – one that is designed meet both immediate and longer-term needs.
Here’s what HR can do to boost financial support for employees in 2023.
First week: develop rapid response initiatives
Start with a small gesture to show the business cares. Keep solutions simple. This crisis is about getting more money into staff pockets as quickly, easily and securely as possible.
Coping with rising food and energy costs is the number one priority for many employees, so it makes sense to focus initial support here.
Then identify other ways to help reduce costs for employees. Look at what you can do to support the cost of work - including travel, lunch and heating for home workers. Solutions include pre-paid cards such as for buying food or meals out. Other practical options include expanding and tailoring employee discount schemes with retail discount options that meet people’s most pressing needs.
First month: review your offerings
Rapid response to a crisis is crucial. But it’s also important to show a considered response as part of your employee value proposition. Businesses must demonstrate through their actions that they have thought about the predicament staff are in and respond with empathy and practical support.
Review your current offerings through a cost-of-living lens to identify which benefits will deliver greatest value to employees and the business.
Survey staff to ask what support they most need and uncover any gaps in current provision. Don’t make assumptions. Leaders will likely be cushioned from the worst impact. Make sure you ask staff across all pay levels how they are affected and what help they would most value.
Equipped with this information you will be in a position to pull together a comprehensive support package. Employee and business needs vary, so a one-size-fits all solution won’t be appropriate. Instead, take time to agree core design principles appropriate to your business. These might include:
• Flexibility: Employers need to be able to adjust support in line with changing circumstances and ramp support up or down. This might include the ability to provide immediate, short-term assistance as well as longer term support. It might also mean providing means-tested or discretionary support, or one-off or repeat payments.
• Digital first: Many employees are working in hybrid or remote patterns. A digital-first approach will help most organisations deliver the support their workforces need in this context quickly, safely and securely.
• In-built risk assessment: Some responses to the cost-of -living crisis unfortunately have unintended consequences. For some low-wage workers, for example, a one-off payment could trigger a cut in state benefits. Similarly, unionised environments have clear rules about benefits. Awareness of such risks will need to be a core component of response plans for many organisations
The months ahead: communication is key
In a fast-changing economic and political environment, it is inevitable that employers will need to adapt support during the year. Longer term, this will mean employers will need to ensure they are monitoring the impact and shortfalls of their cost-of-living response measures. This will be especially important for justifying any further adaptions needed to senior leaders.
It is also important to create a cost-of-living focused communications plan. Even the best thought-through support will only be effective if staff use it. What are the key messages staff need to understand to use the support effectively? Do staff understand how a specific benefit will advantage them? Do they know where and how to access support?
Even if you are repurposing support, the best way to provide answers to these questions is through a cost-of-living hub. This provides a visual reminder that the employer cares and makes it easier for staff to access support in one place. A regular communications schedule driven through the hub will help to maintain a steady drumbeat to remind staff to continue to use the support on offer.
Businesses are operating in a fast changing political and economic environment. Employers don’t know what challenges lie ahead for the business and employees, just that there are likely more to come. By having both an evolving plan in place, HR and leaders can be confident staff are well supported by the business. In turn, employees will be proud to work for a supportive employer.
In partnership with Edenred
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