UK businesses are introducing a range of new perks to hold on to staff but are failing on pay and flexibility, according to research from business performance consultancy, Ayming UK.
The Great Resignation is putting lots of pressure on businesses. 78% of firms report an increase in recruitment and training costs while 63% say staff turnover is impeding growth plans and 60% say it is harder to maintain profits.
In order to retain staff, employers are deploying a range of tactics, such as expanding training and development programmes (31%), introducing loyalty bonus (24%) and stress management programmes (23%), increasing annual leave (18%), paying for commutes (18%), upgrading food and beverages for staff (18%), upgrading offices (13%), subsidising gym memberships (14%), and allowing dogs into the office (13%).
However, despite the competition for talent, most businesses have not given employees pay rises in line with inflation, which will undoubtedly fuel the Great Resignation as staff receive higher paying offers. Only 8% of businesses have given all employees inflation-matching pay rises. On average, employers have given less than half (47%) of their staff a pay rise in line with inflation.
Additionally, the research revealed that almost half (47%) of businesses have not introduced any form of flexible working.
Scott Ward, Partner of People, Performance & Development at Ayming UK, says, “Businesses face a fight for talent. The pairing of a buoyant job market and high inflation means employers are stuck between a rock and a hard place.
“It’s not always possible to give all staff inflation-proof salaries, especially when firms are seeing their own costs go up. Nor is it always possible for employers to offer flexible working. But in this market, the best talent will be receiving higher paying offers elsewhere as well as tempting work packages and will leave if they feel their needs are not being met. Above all, employers must weigh up the costs of salary increases against the cost of losing key people.”
The introduction of new rewards and benefits also reflects the expansion of the HR role into wellbeing as well as the overall employee experience, which was accelerated by Covid-19 and lockdowns. Along with recruitment, wellbeing is the joint biggest priority among HR teams and, showing this expansion of the function, 90% of firms are expecting budget increases in the next 12 months.
Ward adds, “HR teams have suddenly found themselves needing to innovate and reinvent the function. Firms are really thinking about what their employees want, what will get the best out of them, and re-engineering their working practices to meet new expectations. By moving in a people-first direction, businesses will inevitably see spikes in productivity as well as retention.”