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Welcome to our regular HR advice column, Ask a Resourceful Human. Here to answer all of your burning questions is Erin Grau, the co-founder and COO of Charter, a media and services company that aims to transform the workplace. Erin has over 15 years of experience at the intersection of talent and operations in global organizations and startups, including the New York Times and Away. You can sign up for the free Charter newsletter about the future of work here.
As inflation has dominated headlines, this question has been top-of-mind for many HR pros: If you can’t grant pay raises commensurate with inflation, what can you do instead to ease the burden on employees?
While most companies can’t carry the cost of a 9% salary increase, all companies can—and arguably, should—help ease the burden of inflation by offsetting the increased costs of living.
Employees expect to receive higher paychecks when they experience higher costs, so the single most meaningful thing a company can do right now is increase pay. Some companies, including PwC and Exxon, have responded to high inflation by giving midyear raises. In other countries, like Argentina, it is more common to review salaries in stages throughout the year in response to fluctuating inflation as a way to meet the needs of workers without overburdening businesses.
And raises don’t have to be in line with inflation in order to be valuable: A May survey of 337 companies conducted by consultancy Pearl Meyer found businesses increased employees’ base pay by an average 4.8% this year, up from an average 3% annually over the past two decades.
If that isn’t an option, check out this long list of tactics organizations can consider that go beyond salary increases, including:
- Offering one-time cash bonuses.
- Increasing and subsidizing benefits, like childcare and student-loan repayment. (Bonus: there may be tax benefits for your company, too!)
- Understanding where your employees are feeling the most pain and directing relief. Is it gas? Rethink expectations for commuting or provide gas cards. Is it food? Maybe a grocery-store or food-delivery gift card.
- Broadening the conversation from cash compensation to total rewards. Help employees understand their total compensation package, including benefits, 401(k)s, and equity, and highlight any increased investments you’re making. Share a few slides in your next all-hands meeting to create an open dialogue.
HR can also explain why the company isn’t able to offer raises commensurate with inflation, such as increasing supply-chain costs. Transparency is important in times of uncertainty.—EG
What else are you seeing and trying that works? I’d love to hear them. Or do you have a different question about HR? Let us know at [email protected]. Anonymity is assured.