Are you one of the 48% of employers who think that wage pressure is becoming a real issue?
Real wages are at their lowest level since before the crash, and still falling apparently. Nothing new there. But now there’s so much talk of recovery and growth, employees are starting to question why they’re not getting a piece of the action, especially after years of rising costs at home and flat wages.
And the media isn’t helping. I’ve seen lots of features on the TV and in the papers telling people how to go and ask for a pay rise. And I’m not against people getting a fair wage, but with the pounding most businesses have taken in the last 6 years and just now seeing the start of things getting better, your don’t need your bottom lines to be hit with unexpected and unplanned pay rises.
And Auto Enrolment is on its way. With staging dates for many small companies this year, you could be looking at a double whammy of increased costs.
But can you do anything about it?
1) Don’t ignore it. It could mean you losing good staff and having a pretty dis-engaged workforce, or making a lot less profit than you’d planned to. Make sure you’ve got a strategy of some kind for tackling the inevitable.
2) You need to plan any wage rises. Make sure you’ve calculated the effect and run it through your budget first (and remember to include NI at 12.8%)
3) What members of staff would you definitely not want to lose, or you think might be unhappy? Can give them a small rise that keeps them onside.
4) Can you give a small inflation rise across the board (if your finances allow it)? Your staff should appreciate the gesture and it’ll hopefully stop them asking for more rises.
5) Are you talking with your team about where the company is? If they understand your challenges and goals they’re more likely to be understanding.
6) Are you paying below the industry average? If you’re in line with everyone else there’s less risk of people leaving, but if you’re below you know you’re more likely to be losing staff to competitors. Then you can weigh up the cost of rises against having to recruit and re-train.
7) Think about having pay rises, or bonuses as incentives for the individuals and / or the company hitting specific targets.
8) Are there more imaginative ways you could keep your people loving you? Some extra time off to recognise hard work, a voucher to say well done, how about paying for a training course?
9) People want to be recognised, appreciated and valued by their bosses, and one of the most common complaints I hear from staff in companies is that no-one tells them what’s going on. So with just a bit of time and thought you can take control of wages pressure and plan for it properly so it doesn’t take you by surprise and put a hole in your profits.
And I know. A lot of this is obvious. Obvious is good. It’s just that it’s so often overlooked!