Creativity is key when responding to wage pressure

In order to stand out from the crowd and attract a wider range of employees, companies that consider which demographic and type of workforce they are aiming to recruit, and then tailor their offering specifically, will be best placed in the current talent shortage.  By Cathy Hendry.

As inflation and talent shortages remain at historically high levels, organisations are looking at more than just lifting wages as a response. 

A recent pulse survey conducted by Strategic Pay showed organisations are now forecasting salary increases of between 4-5 percent, this is up significantly from this time last year when they were sitting at 2-3 percent.
It will be interesting to see if these forecasts increase further, as a review of actual increases over the last 12 months showed organisations ended up 
re-forecasting their salary budgets upwards from their original projections.
Given the factors that are contributing to high wages are likely to continue into 2023, feedback from this same pulse survey suggests organisations are trying to focus on more than just pay to attract and retain their key staff. 

While offering higher pay to staff was still the response for 23 percent of respondents, over 20 percent of organisations indicated they were looking at offering additional benefits to their employees.

Common additional benefits mentioned in the survey included:
•    Extra or additional leave allowances.
•    Increasing EAP offerings.
•    Employee discount programmes.
•    Wellbeing initiatives.
•    Health insurance.
•    Discounted parking.
•    Nine -day fortnights.
•    Long service leave.
•    Health and fitness initiatives.

In addition to extra benefits, 16 percent of organisations indicated they were offering flexible working and 15 percent of organisations were focusing on EVP (employee value proposition) initiatives.  

With rising wage bill costs employers appear to be looking at more creative ways to reward their staff. However, with more organisations trying to be creative, it will become a case of how to stand out of the crowd and attract key staff. 

Workplaces have undergone significant change over the last 24 months and research into the great resignation suggests there are less employees happy with the traditional 9am to 5pm workplace and most are looking for organisations to offer a lot more both in terms of work and reward structures.

The issue is most organisations are still adopting the same traditional practices to recruit and retain staff and these are likely only going to be attractive to a smaller group of employees over time. 

In order to stand out from the crowd and attract a wider range of employees, those that consider which demographic and type of workforce they are aiming for will be best placed.

The concept of tailoring benefits or reward offerings is not a new concept, however the diversity and changing needs of employees has seen a dramatic shift over the pandemic. 

While introducing health insurance as a new benefit for all employees may sound like a good idea for someone who has a family and is in their 40s to 50s, it will have very little value to an employee in, say, their 20s who is wanting to save up for a house deposit or who is possibly trying to work out how to cover the latest rent or mortgage rate increase.

It could be that we will see a shift to a suite of benefits and reward offerings, rather than a one size fits all. 

However, for any organisation that is considering adding or expanding their reward offering, it would be recommended to start with asking what their employees would value most, something as simple as offering flexibility to start and finish times for instance could actually be of great value to an employee and of little cost to an employer.  

Cathy Hendry is the CEO at Strategic Pay. 

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