Retaining Employees Through High Inflation

Inflation is running at an all-time high. How can businesses support their employees through these difficult times?

Businesses around the world have managed their way through formidable challenges due to the pandemic, and now they must contend with inflation.

Inflation is running at a 40-year high, and this puts upward pressure on salaries. To hold on to employees, businesses have to dig deep and find the budget to give employees salary increases that keep pace with the cost of living. The current rate of inflation creates several challenges for businesses. Employees are expecting salary increases, but businesses are also dealing with other costs such as rent, electricity and increased fuel prices.

Due to the much publicised “Great Resignation” since the pandemic, many firms are also dealing with a scarcity of talent. Failing to boost employee compensation may mean that more employees go elsewhere.

Flexible working and development opportunities

So, what can firms offer to their staff other than (or as well as) increased salaries? Well, the pandemic has cemented the expectation of flexible working. Perhaps your firm could offer more flexibility and more autonomy to your employees. Offering your employees the freedom to work when and where they want, with access to a physical office or place of work when needed, maybe something that they would really value.

Another strategy may be to offer increased learning and development opportunities for your team. Equipping your employees with the knowledge, skills and experience to develop in their careers may be more valuable than a pay rise. Training them may also help them feel more valued, and their loyalty may increase as a result.

Offer additional benefits

Finally, there may be additional benefits such as healthcare, dental cover or a gym membership that you could offer your employees, which they may value as much as a pay rise.

Tough Times Make Us Better Leaders

History tells us that great leaders tend to emerge during tough times.

The economic outlook is currently quite gloomy. There is a lot of talk of a recession; costs are rising; there is a shortage of talented employees, and the economic landscape is shifting daily.

focus on what you need to get right, don't worry about things you can't control.

So, what do the best business leaders do in order to thrive during tough economic times? To start, focus on what you need to get right and stop worrying about the things that are outside of your control.

There will always be some level of uncertainty in business, so do your best to make decisions using the best information that is available, but don’t worry if you don’t have all the facts.

The best business leaders focus on achieving their overall strategic objectives. They show initiative, assertiveness and discipline.

An authentic leader is committed to learning and understanding.

During uncertain times, people often look to the leaders of their firm for guidance. As such, authenticity is key. An authentic leader is committed to learning and understanding the key strengths, weaknesses, and opportunities from each part of the business.

Ask questions and listen actively to your team members. Ask them to share their views and involve them in making some of the decisions. This will help your employees to feel like a more cohesive team and will build confidence in the leadership team.

In a turbulent market, businesses become more risk-averse. Most management teams will tighten budgets and may even reduce the size of their workforce.

Focus on optimising your business to weather the storm.

However, scaling down investment programmes and cutting the size of your workforce too drastically can have a very negative effect on long-term growth, as well as employee morale.

Instead, focus on optimising your business to weather the storm. Consider where you can gain some ground from competitors who perhaps cut back a bit too much. Maybe there will be an opportunity to hire some of their talented employees or even win some new clients if they don’t have enough employees to service.

Finally, do some reading. Read case studies on successful leaders of the past and how they weathered the storm of a difficult economic scenario. What can you learn from them, and how can that make you a better leader? Tough times present you with the opportunity to reshape yourself as a highly effective leader.