OK, so that was a crass attempt to write a headline in keeping with the month of St. Valentine but nonetheless, it’s true to say that retention of staff (and figuring out how much they love their job) is undoubtedly something that employers are grappling with at the moment.
There’s no doubting that Covid has had a wide- reaching and complicated effect on employment, the economy and the way we work. Some of my clients suffered severely as a result of the pandemic but there were also plenty of clients that prospered. Some of those organisations are very much operating their business as usual, while for others the structure and way they work has changed radically and will never go, ‘back to normal.’
As a result of this so-called, ‘Covid Effect,’ employee behaviour has shifted. And it’s this, combined with market factors that is driving the extremely challenging circumstances in which employers are having to set bonus and pay decisions this year. Employers don’t necessarily want to change how they have always carried out their annual pay reviews; in my experience, this usually involves looking at company coupled with individual performance whilst taking into account business critical roles and key individuals. But for many (especially those that froze pay in the two previous years), 2022 presents a seismic shift in power –employees are driving the market.
So, what are the key factors employers face?
• the switch to home working – whilst positive for many staff allowing them to save on commute time and cost, it can be tricky for employers who now have to compete for employees across the country (even outside the UK!)
• major skills shortages – this has been driving up wages in certain sectors particularly retail, hospitality and logistics,
• paying higher salaries to attract candidates has knock on effects for existing staff – watch out for potential discrimination and equal pay claims
• ad hoc bonuses can also be a possible minefield – employers must ensure they are fair and equitable and consistency is key
This year it’s likely your organisation will be scratching their heads much more than usual to try and find the right balance between motivating and retaining staff whilst making pay decisions that are affordable. At the same time, there will be lots of employees who look around and realise they can gain substantial increases in salary by jumping ship and taking that job with a competitor. That can be a very difficult incentive to resist, especially when you consider rising inflation, pay freezes that have been in place for many and the fact that so many employers offer full flexibility in terms of hybrid or remote working.
Here’s one simple thing that employers can do: have a ‘stay’ conversation. That is, talk to your employees, discuss how things are going from their point of view, find out what motivates them to stick around, and genuinely find out what you can do to help them stay.
Lots to think about. Watch out – 2022 is going to be a bumpy ride!
By Ruth George – HR Consultant
This is not legal advice and is provided for general information only. © Ruth George HR Consulting.