In order to stay competitive, HR needs to provide support and resources to the workforce during these especially hard times.
By Simon Kent
The cost-of-living crisis has presented HR and businesses in general with one of the most challenging environments for talent management. In addition to the ongoing skills gap, an emphasis on hybrid and remote working, and the demand for a competitive benefits package, there is a pressing need from employees for support and guidance on how they can weather the economic storm.
The Robert Half 2023 Salary Guide found that 25% of employers across Continental Europe and in the UK are reporting to be very concerned about their ability to attract talent this year, with 27% also worried about retention.
“We have seen many companies offering monetary inflation compensation in the form of one-off payments,” says Matt Weston, senior managing director for UK, Ireland, Benelux, and UAE. “Our research reveals that over a quarter of firms in Europe and the UK have increased salaries or pay bands as a retention tool.” Weston notes additional benefits offered by employers are not always financial. For example, working from home and increased work flexibility is still being treated as a benefit to deliver a better work-life balance and even lower monthly living costs.
This kind of benefit strategy could become a mainstay. “The support we are seeing is certainly not being regarded as a short-term investment by the vast majority of firms,” reports Weston. “The fact remains that the large majority of employers still face a persistent candidate-driven market and are under pressure to not only provide competitive job offers, but also to create an environment that discourages top talent from leaving.”
Parcel carrier Yodel is all too aware of the competitive environment it faces in terms of its talent requirements. The company is in constant communication with its workers, both directly and through discussions with unions, allowing this discourse to ensure the benefits and support it offers are in tune with the realities of what their workers require.
“Our annual well-being pulse survey helps us to ask important questions about how our employees feel about the programmes we offer and what we can do better,” explains Alison Richardson, director of HR operations at Yodel. Interestingly, the survey drew five times more responses this year than last, demonstrating the importance employees currently place on what they’re getting from the workplace.
On the basis of the feedback that was received, the company introduced more “Mental Health First Aiders” into their network, using training accredited by Mental Health England. This year, 78% of Yodel colleagues have said they know how to access support when they need it.
“The real challenge is getting recruitment and retention levels right in a competitive industry and against a challenging economic backdrop,” says Richardson. “Staying ahead of the competition for talent requires a refreshed focus on pay, benefits, and flexibility. At Yodel, we ensure our strategies are regularly updated in order to stay ahead of the curve.”
Richardson explains the business has contingency plans in place to respond to sudden changes such as economic downturns or even another pandemic. “When needed, we take time out to communicate with all our colleagues across different locations to inform them of any changes that may need to take place,” she adds.
According to Stephanie Parton-Corr, director of health and benefits at WTW, most corporate well-being programmes are structured around four key pillars:
• emotional;
• physical;
• social; and
• financial.
Historically, financial well-being has been the weakest of these areas and WTW’s biennial 2021 Benefit Trends Survey found that 42% of employers cited this pillar as a weakness. Perhaps unsurprisingly, businesses are acting to remedy this.
“Financial well-being has come to the fore as a result of the current cost of living,” says Parton-Corr. “We expect to see the financial well-being pillar retaining its increased importance in corporate well-being programmes and having the same level of focus as traditionally granted to the emotional, physical, and social pillars of well-being. Employers are seeing the significant value of taking a holistic approach to addressing employee well-being, and employers understand the significant impact financial circumstances have on overall well-being.”
Chris Ronald, vice president of EMEA, incentives, reward, and benefits at Blackhawk Network Europe, says the cost-of-living crisis has “completely shifted” the priorities of businesses with many working to ensure their benefits schemes are real and tangible rather than a tick-box exercise. The company’s own research found 69% of employers feel a responsibility to support their staff through the crisis, with 86% feeling their benefits should target this issue.
The answer for Ronald is to offer a blended approach. “There needs to be a mix of financial and mental health focused benefits on offer,” he says. “It’s important that HRDMs really listen to their employees’ needs to ensure any benefits packages are not underutilised, one-hit wonders, but actually form part of a long-term, sustainable strategy that will truly benefit employees and help increase retention.”
Moreover, Ronald is keen to point out that the HR department can address this swiftly, rather than waiting for the annual review and attempt to forecast what will be needed over the next 12 months. “A common misconception is that benefits packages are static,” he says. “In fact, 37% of HRDMs are reviewing their benefits package at least quarterly.
“Responding to employees’ needs is almost as important as offering the benefits in the first place,” he says. “The offerings must feel authentic and personalised in order to be successful.”
Should the first move HR makes in the face of the ongoing crisis, and in the light of recent history, be to ensure their benefits have the required flexibility to meet the ever-changing needs of the workforce? In a world where rapid and radical change has become part and parcel of business life, securing that flexibility could be critical if HR is to create and maintain an engaged workforce.
