Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide, which is triggering tighter financial conditions, along with further negative impacts on supply chains from the war in Ukraine.
This worry translates into pressure on salary increases by employees seeking to offset the increasing cost of living. Yet at the same time, companies may face pressure to halt hiring and reduce headcount costs.
As organizations navigate ongoing uncertainty and unpredictability, business resilience has never been more critical. As caretakers of the organization, there are multiple ways HR can support the business and its employees while building business resilience.
1. Manage fixed costs tightly
Your people are your biggest asset and, therefore, the highest cost – but keeping your top talent will pay dividends, as they could be the linchpins needed to ride out the economic storm successfully.
If you’re fearful that valued employees might be at risk of being laid off, look at your data to see if you can create a strong business case for retaining them. Any key performing indicators (KPIs) or productivity stats might be beneficial here.
Likewise, if their requests for a salary increase will cause them to leave, can you be smart and offer other incentives such as a four-day work week or a training course or qualification if there’s pressure on fixed costs?
Focus on productivity – ensure you’re paying for performance – and look at ways to boost employee productivity sustainably.
2. Increase total compensation through variable cost incentives
Consider using bonuses, stock grants, and other incentives to offset lower base salaries, and offer gift cards or equivalent (company-branded items, especially clothing) to help maintain motivation.
Be open and transparent about pay and benefits, communicating how the grading system works and how wage levels and salary increases are decided. If employees understand what’s happening at the top, they are more likely to respond better than if they feel they are being kept in the dark.
Finally, consider well-being incentives, offer additional paid time off, and remember recognition and spot awards as additional ways of recognizing successes in your workforce.
3. Offer flexibility as a financial incentive
Flexibility is a strong bargaining chip for most employees. A shorter working week – condensing someone’s hours into four days, for example – or offering an employee the chance to work part-time could hold a lot of weight with some employees.
Likewise, unpaid sabbaticals can be the perfect motivator for an employee considering traveling or taking some unpaid leave.
Although remote hybrid working feels like the norm, perhaps your company isn’t offering it as freely as possible. Investigate to see if there’s even more flexibility in how employees work that could be offered as an incentive.
4. Personalize employee experiences
Adjust management styles and deploy situational leadership where necessary to suit individuals and teams or squads and communicate early and often. Being open and transparent in discussing company performance will make employees feel valued.
Providing employees with more autonomy in decision-making where possible and creating a listening culture so you can act on feedback and communicate necessary actions or suggestions are all ways of generating personalized employee experiences.
Also, look at offering stretch assignments, growth opportunities, and meaningful and worthwhile work, as well as automating low-value or tedious work.
Behind every downturn is the chance to innovate
These things are just some of the tools are your disposal to enable you to not only support your employees but create an adaptive organization that’s agile, flexible, and resilient and one that can quickly respond to ongoing uncertainty and changing priorities.
Coupled with an agile, flexible cloud HR platform, you can enable rapid, data-driven decision-making, easily tailor employee experiences for individuals and teams, and support changing global policies and local compliance. Being prepared is always a smart move in uncertain times. That much is certain.
Information used in this article was provided by our partners at Sage.