With rising inflation and living costs, do you need to give your team a pay rise?
The cost of inflation and living have already rocketed this year. In fact, after decades of low UK inflation and wage increases, the rise of 5.4% in December was a shock – it’s the highest rise in 30 years.
And although last month the National Minimum Wage and National Living Wage increased, this rise isn’t enough to absorb the cost of living – especially considering the National Insurance increase of 1.25%. And what do you do if your employees already earn more than National Minimum Wage?
There’s a chance that if you don’t acknowledge the increased cost of living and consider pay rises for your people, you risk losing them. And since it’s a candidate’s job market at the moment, the usual fears that come with leaving a job are increased.
If you don’t already, hold regular pay reviews with all employees. A good time to do this is during appraisals or 121s.
It doesn’t mean you need to increase everyone’s salaries right away, but instead it opens lines of communication with your team about the possibility of a pay rise.
Set each member of the team a series of goals or targets they have to meet in a specific time frame. If they meet these targets, then they’re on track for a pay increase. Not only is this a good way to improve performance within the business, but it also gives you an insight into how your people wish to progress at work.
You may also be able to set training goals and link this to a pay increase too. When the subject of a pay rise is approached in the right way, it really can work out well for everyone.
We understand that the cost of living rising has had an impact on businesses too and it may not be possible to offer employees pay rises. In addition, you can look at other solutions that will help you retain good employees.
One way you can help is by offering hybrid working if this works for your business. This will allow your employees to work from home half of the week which will help them to save on travel costs. Read more about hybrid working in this latest article.
Other benefits such as private health care, discount codes, voucher rewards, insurance, and gym membership schemes can go a long way to helping reduce costs for employees.
If you’d like more help or guidance in dealing with pay rise requests, we’d love to assist you. Just give our team a call.