The war for talent and salary inflation
//12-01-2023

The war for talent and salary inflation

by Nick Gallimore, Director of Innovation

Today’s job market is an extremely scrappy and competitive space with organisations desperately vying for what seems to be a relatively narrow crop of talent. The key to success may very well lie in how organisations are able to distinguish themselves from their competitors.

In the wake of wider economic downturn and other macro-economic factors, organisations also find themselves in a bind. With costs rising, employee priorities are understandably shifting towards securing competitive salaries in order to ensure they are able to meet the cost of living challenges. This has led to salary inflation as more and more organisations escalate pay in order to secure key talent.

At Advanced we believe there is more to succeeding in today’s competitive recruitment space than just focusing on what is being offered on payslips. We want to encourage businesses to demonstrate creativity and agility in their offerings and to offer some suggestions to empower organisations to transform the way they approach the hiring, development and retention of their people.

Pay on demand

A cornerstone of emerging reward schemes, particularly in light of freezes on wages, will be the ability to offer flexibility in how you pay your people.

Pay on demand is a form of employee payment method which allows people to receive wages as they earn them. Rather than being tied to the traditional model of weekly, fortnightly or monthly pay, pay on demand allows employees the ability to have their wages “streamed” to them as and when they work shifts- avoiding long stretches of time between pay periods where money might be tight.

Another element of pay on demand is allowing workers the possibility to have their wages still tied into a rigid cycle but to also offer them the flexibility to draw down early, a portion of their salary in order to help cover emergency expenses or simply to cover a period of unusual spend (such as Christmas time or an MOT period for a vehicle.)

Have you ever explored the potential of offering this benefit to your employees? In times of crisis, cost neutral solutions like pay on demand become worth their weight in gold, After all, what’s not to like about a free benefit to your people?

Making the most of Internal mobility to attract talent

With finances stretched tight and little scope for increased salaries available, businesses need to consider how offering opportunities for growth and development can benefit both themselves and their employees.

Hitting a perceived ceiling when it comes to learning, development and advancement is one of the key factors which spurs people to move on from their current places of employment. It makes sense therefore, for any organisations looking to attract these candidates to offer a well defined pathway for advancement. 

A competitive salary is an attractive element of a job listing but ultimately can be fairly narrow in scope. What if you could offer a candidate the opportunity to continually grow and develop within your organisation and have their earnings scale up with them?

Internal mobility is a boon to more than just talent attraction too- employees who have an understanding of their opportunities for advancement will undoubtedly feel more engaged with their workplaces- research by MHS found that 96% of employees felt they would be more likely to stay with their current organisation if they offered a clear and well defined programme of training and development.There is a strong appetite from employees to earn more and therefore it is vital that your people teams are communicating with your workforce and making them aware of just how they can advance their careers internally.

Rethinking your rewards schemes

When macro-economic factors make their impact known, it can often mean that the finances of businesses are heavily constrained- this in turn can affect organisation’s abilities to reward their people through more traditional means such as salary increases.

But what if these constraints actually offered a unique opportunity to move away from viewing salaries as the monolith of all rewards structures? What if you took the time to rework your benefits and rewards strategies from the ground up and created a range of offerings which reflected the needs of today’s workforce?

There is increasing evidence of the growing importance to have a clear structure around employee benefits and rewards in place within your organisation- a survey by Aviva  found that 48% of people stated a desire for some form of wellness benefit when assessing an organisation. 

This suggests that although salaries remain a relevant factor when assessing an organisation, increasing amounts of employees are looking for benefits which reflect their desire for greater physical and mental wellbeing as well as offering a strong sense of work-life balance. If you find that external factors are impacting your ability to offer flat salary increases, consider how focusing on embedding a strong people experience and offering candidates a sympathetic, rewarding and nurturing working environment could help you stand out from the pack.

Offer greater flexibility

The hybrid/remote working debate has been a dominant factor over the past few years. What began as emergency measures have now largely become a successful and well embedded part of workplace structures. Incidences of organisations attempting to impose widespread returns to older, more rigid models- particularly in high profile cases such as with Twitter, have led to many employees choosing to move on from their places of work. The message is clear- regardless of salary, if organisations fail to offer a degree of workplace flexibility in line with the demands of today’s workforce, they risk an exodus of talent.

Hyrbrid models also offer another fundamental benefit- as wider economic downturn deepens, there is a sense that flexible working models have a further evolution to make, one where they pivot to becoming one of the most effective ways for organisations to safeguard the financial wellbeing of their people.

Removing the need to be tied to an office location actually offers an unprecedented opportunity to help safeguard financial wellbeing. By having an effective remote setup in place, businesses can do away with the need for a costly daily commute for their people, which in the context of rising fuel costs in the UK, will go a long way towards softening the blow for many. It also helps focus the efforts of businesses when it comes to structuring their own rewards schemes. Many organisations offer company cars or other travel stipends which can be deprioritised with the introduction of remote working models.

Offering a greater degree of workplace flexibility is also a cornerstone element of redressing the work-life balance for many. In the post-pandemic working world, many employees have come to enjoy the flexibility provided by hybrid working models and will be loathe to give them up when looking at a potential new employer. Therefore, offering working structures in line with the needs of today’s workforce could be a very persuasive element when it comes to talent attraction and retention.

More than money?

Even with money concerns being thrown into sharp relief by various ongoing crises, how dominant a factor is salary for people when it comes to assessing potential places of work?

The EVP (sometimes known as the Employer Value Proposition) must come as a priority in any future strategic planning. The working world has undergone a fundamental shift in recent years and employee engagement, as well as the ways in which employees perceive and judge their places of work are now crucial elements which cannot afford to be overlooked.

What was once considered as a “nice to have” or vague, blue sky concept is now forming a core component of how successful businesses not only think about how they distinguish themselves above their competitors when it comes to securing new talent, but also how they are able to retain the services of their most skilled and key people. Organisations and their HR teams cannot afford to wait around and find out passively what their people and the wider market think of them as an entity.

What’s next?

The working world has undergone a fundamental shift in recent years and employee engagement, as well as the ways in which employees perceive and judge their places of work are now crucial elements which cannot afford to be overlooked.

What was once considered “nice to have” or vague, blue sky concepts are now forming a core component of how successful businesses not only think about how they distinguish themselves above their competitors when it comes to securing new talent, but also how they are able to retain the services of their most skilled and key people. 

Organisations and their HR teams cannot afford to wait around and find out passively what their people and the wider market think of them as an entity. Creativity and agility is needed in both taking stock of what makes their organisation an attractive prospect for candidates but to also ideate and implement strategy and policy which reflects the needs of the modern workforce

At Advanced, we believe the people experience is a critical factor in determining the long term engagement, happiness and wellbeing of your employees and there is clear evidence to suggest a growing priority for organisations to offer rewards and benefits schemes with a strong focus on the work-life balance and overall health of their people, rather than merely focusing on salary

We’ve created our HR Crisis Toolkit specifically to provide organisations with tools and ideas to help spark the creative process and help you understand how you can put the people experience of your workforce first, no matter the situation. Download the free toolkit today to discover how you can transform your approach to hiring and retaining the key talent you need.

Nick Gallimore

Nick Gallimore

PUBLISHED BY

Director of Innovation

Nick is a Talent Management specialist, who has spent his entire career working with organisations looking to transform the way they hire, develop and manage their people. He works with our HR software customers, providing specialist consulting and advice around all aspects of the Talent Management lifecycle, helping them to deliver their strategic people aims.

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