According to a recent independent study conducted by specialised recruiter Robert Half, many employers acknowledge the challenges their employees face in keeping up with the pressures of inflation and the rising cost of living in 2023.
The study found that a significant proportion of employers, almost nine in ten (89 per cent), have taken proactive measures to support their employees during these uncertain times.
One of the most common steps taken by employers to mitigate the impact of the rising cost of living on their staff is the provision of permanent pay raises. More than half of the employers surveyed (53 per cent) reported offering their employees a permanent pay rise. This move serves to alleviate some of the financial pressures on employees and help them keep up with the rising cost of living.
Additionally, the study found that other measures taken by employers included providing additional benefits and perks to their employees, such as flexible working arrangements, enhanced health and wellbeing programs, and more generous leave entitlements. By offering these additional benefits, employers hope to ease the financial strain on their employees and support their overall wellbeing.
To help employees cope with rising costs, employers are predominantly offering non-financial assistance, such as expanding remote work options to reduce travel expenses (57 per cent) and providing mental health support (55 per cent). Working remotely can yield substantial savings on transportation costs, which rose by 8 per cent in Australia in 2022.
However, a greater number of employers are now providing direct financial support to their employees. This includes granting permanent salary increases (53 per cent), offering one-time bonuses (49 per cent), and allowing workers to sell their annual leave (44 per cent).
Additionally, 45 per cent of employers are permitting employees to access their earned wages before payday. To alleviate the immediate strain of rising food prices, which have increased by 9.2% in 2022, and to boost employee morale, 44 per cent of employers are subsidising meals at work, and 50 per cent are giving gifts to employees.
Employers responded to the inflation surge in 2022, which hit an annual high of 7.3 per cent – the highest it’s been since the late 1980s – by providing support to help their employees cope with living costs in 2023 and beyond.
Financial management training (43 per cent), new salary sacrifice schemes (45 per cent), and income stream services (45 per cent) are among the measures being taken by employers to equip employees with the skills and services needed to improve their financial situation.
Despite this, 11 per cent of employers have yet to take steps to aid their staff with the rising cost of living. These employers run the risk of losing their best talent, who may not feel supported during this period of financial strain and uncertainty, and may opt to seek employment elsewhere with an organization that offers more comprehensive support.
Andrew Brushfield, Director at Robert Half, said, “With economic conditions in flux, savvy employers are stepping up to address the rising cost of living to ensure their employees receive the necessary support.
They understand that failing to take action is a gamble that may result in the loss of valuable talent, particularly when observing how other organizations are supporting their staff.”
“With inflation increasing and with many companies unable to offer salary increases to keep pace, some are reverting to their benefits offerings to attract and retain staff. Support doesn’t just have to be financial, and providing counselling or mental health assistance and allowing staff to work from home can make an employee feel they are supported. Companies are being creative, focusing on a mix of wellbeing, flexibility and other perks to help their staff enjoy a more positive working experience.”
“While not all businesses have the budget to be able to implement many of the changes, they can still focus on implementing measures that do not require high upfront costs to show their support to employees still.
In addition to non-financial support, companies must still consider the financial incentives that can be offered and can directly assist employees during this time of rising cost of living. Salary remains a top priority for most in today’s market. If no strategies are in place, companies run the risk of losing employees to businesses who recognise and are willing to take action from a financial point of view.”
“Finally, employers should have ongoing open conversations with their employees on what motivates them, which can allow for new ideas as to what employees need,”concluded Brushfield.
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