By Wasana Nadeeshani
(Commonwealth) _ The cumulation of a widening skills gap and continuous labour scarcity has produced a candidate-driven market. This move, in turn, has drastically altered workers’ pay expectations. Workers in many parts of the world, for example, are less inclined to accept stagnating salaries because they have more alternatives. When you combine these considerations with current inflation fears, it’s clear to see why wages are rising. Still, the inevitable reality is that in order for organizations to obtain and keep talent, they must give competitive salary, reasonable pay raises, and perks, sometimes known as incentives.
According to new findings first from Randstad Q4 Workmonitor Pulse survey of 7,000 workers in the United States, United Kingdom, Australia, Germany, and the Netherlands, employers have an opportunity to better support their employees through a broad range of financial rewards during the current wave of surging prices and higher cost of living. The findings indicate an urgent need for further assistance to withstand the inflationary crisis.
With billions of workers hit by the greatest inflationary pressures in generations, it’s no wonder that far more than half (52%) of those polled expect their company to boost their income outside of the typical cycle of yearly pay reviews. Almost half (45%) want their businesses to achieve this by granting a monthly wage increase to compensate for increasing costs of living. Salaries, like any other service on the market, are determined by supply and demand. With 54% of organizations worldwide noting a talent shortage, there is clearly a significant need for talent.
With an increase in demand would lead to an increase in projected salary offerings. Employees’ expectations are so high that they are prepared to switch employment to get the income and perks they believe they are entitled to. In summary, if your firm does not spend in building a competitive compensation plan, it will most certainly lose some of its top employees.
Upgrading benefit packages
Whether your organization is currently suffering from staff retention difficulties or not, now is the time to consider assessing compensation and upgrading your benefits package. The good news is that increasing your pay plan may provide your organization with a number of benefits
According to studies, there is a clear relationship between better salary and higher staff retention rates. According to a recent Harvard University research, a $1 per hour wage rise among warehouse employees resulted in a 2.8% improvement in retention. Even more concerning findings reveal that every $1 per hour decrease in salary resulted in a 28% rise in turnover rates. It’s simple: if your firm isn’t paying competitive wages, your present employees are more likely to leave.
Even if your organization is not now facing a serious labor shortage, it, most certainly, will face labor issues in the future. The fact is that the skill scarcity isn’t anticipated to ease any time soon. Indeed, some analysts forecast a worldwide skills deficit of around 85 million workers by 2030. If you do not take actions to prepare your organization now, it may be difficult to meet your workforce demands in the future.
When done correctly, a compensation rise can really pay for itself, offering a high ROI. The challenge is to find the best wage package – one that is robust enough to keep your present employees , while remaining within the corporate budget. When the ideal compensation range is found, your organization may save through less overtime pay, fewer absenteeism and lowered hiring costs.
Let’s be honest about it. Despite your best efforts, you will not be able to retain all of your employees. Employees will leave and these roles must be filled. Recruiting talent will become increasingly challenging as the labor crisis grows and the skills gap widens. A competitive wage and benefits package might assist your organization in attracting competent applicants and convince them to accept the employment offer.
