Employers have an opportunity to better support their employees through a variety of financial incentives during the current wave of surging prices and higher cost of living, according to new findings from the Randstad Q4 Workmonitor Pulse survey of 7,000 workers in the US, UK, Australia, Germany and the Netherlands. The findings reveal a pressing need for more aid to weather the inflationary crisis.
workers lean on employers for help
With billions of workers affected by the highest inflation rates in generations, it’s no surprise that more than half (52%) of those surveyed want employers to increase their salary outside of the usual cadence of annual pay reviews. Nearly that many (45%) want their companies to do this by providing a monthly pay boost just to overcome higher cost of living – something that is broadly unheard of in most economies.
These revelations are not unexpected as skyrocketing energy prices, borrowing costs and spending on everything from cars to food has forced many people to expect their paychecks to keep up with inflation. And for most younger generations, this is the first time they have experienced this level of inflation – a predicament that few know how to manage. So expecting their company for more financial support is a natural reflex.
What is surprising, however, is the gap between what people want and what they have received during these uncertain times. Although a majority want pay increases more often than once a year, just 11% have gotten this in the past six months. This means they are pressed to absorb ever-rising prices even when they have received raises. It’s a concern shared among the young and old
“Even though I have received a pay increase during the past six months, I am still concerned that my real income is falling behind inflation,” said Michael, a 62-year-old American IT professional who asked for anonymity because he didn’t have permission from his employer to speak on the record.
Among millions of Americans who were fortunate to receive a salary increase in the past six months, Michael said the higher cost of everything in the US has made him keenly aware of how quickly his pay is eroding in 2022. With retirement in the near future, he said he’s concerned whether the savings he has will be enough.
diverging views among generations
Older workers are least likely to get extra help outside of annual increases from their employers, according to our research. More than two-thirds (69%) of those 55 to 67 said they have received no additional income than usual. It appears among all age groups, the youngest were most likely to have received some kind of added pay – either a one-time boost or subsidies to offset higher cost of living.
The generations also diverge around expectations. Whereas a majority (55%) of Millennials and Gen Z workers expect employers or the government to bear the primary responsibility for helping them to manage higher costs, a minority (43%) of Gen X and Boomers feel this way. When broken down further, people believe the government should be most responsible. Around 2 of every 5 (42%) believe public policy is key to helping them cope with inflation, compared with just little more than 10% who say it’s the responsibility of employers.
This expectation for government action will likely have tremendous political impact in the months ahead. Even so, the degree of influence will depend on the country. In the US, just 21% place responsibility on the government, but that figure is 46% in the Netherlands, 53% in the UK and 60% in Germany. In markets where socialists policies are more active, the expectations for government intervention are higher.
strong actions needed for retaining talent
Even so, employers need to be mindful of how they support their workforce in the months ahead. The Great Resignation continues to affect talent scarcity in markets such as the US, and wage inflation is being felt across many places around the world. Some employees are already seeing more support from their companies, including 11% who say they have received pay increases outside of their usual cadence of annual reviews, and 9% have gotten a one-off adjustment.
To ensure they retain their workers, companies will need to provide a better talent journey for their people. To do this consider:
- Closely monitoring compensation practices, especially for in-demand skills. Make sure pay policies are also well communicated to better manage workforce expectations.
- Making sure employer brand building is a sustained practice because employers will need to compete on more than just pay.
- Regularly surveying workforce sentiments to ensure company policies reflect the desires and needs of employees.
- Offering ways to help workers offset higher costs, such as allowing more remote working arrangements to save on commuting costs or subsidizing spending such as for childcare or health services.
Workers around the world experienced tremendous difficulties during the past two years and were able to bounce back. Surging inflation is yet another challenge they are loath to take on. Companies that are especially proactive in helping their employees overcome higher prices will likely be the most successful in nurturing a loyal and productive workforce in the months ahead.
Download the 2022 Workmonitor to hear the voice of employees around the world on what they want and expect from their employers and how willing they are to ask for it.go to workmonitor