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 a Randstad survey of 2,022 UK workers*. 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 (53%) of those surveyed want employers to increase their salary outside of the usual cadence of annual pay reviews. Nearly that many (48%) 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.
[survey data] which of the following would you want your employer to do in the next six months?
(top two desired actions respondents want their employer to take in the next six months)
- Increase my salary in line with usual cadence of annual pay reviews - 44%
- Increase my salary outside of the usual cadence of annual pay reviews - 53%
- Provide a one-off cost of living payment - 28%
- Provide a monthly cost of living pay boost - 48%
- Provide subsidies for the cost of energy, travel or other daily expenses - 28%
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 salary 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 10% 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.
[survey data] outside of your usual annual salary increases, is your employer giving you additional assistance to manage the increasing cost of living?
- Yes, they already have - 21%
- No, but I expect they will - 16%
- No, and I don't expect they will - 63%
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”
diverging views among generations
Older workers are least likely to get extra help outside of annual increases from their employers, according to our research. Seven in 10 of those aged between 55 and 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 – a quarter (25%) either received a one-time boost, monthly boost or subsidies to offset higher cost of living.
The generations also diverge around expectations. Whereas a majority (63%) of Millennials and Gen Z workers expect employers or the government to bear the primary responsibility for helping them to manage higher costs, compared to 43% of Gen X and Boomers feeling this way. Encompassing all age ranges across the UK, 53% of people believe the government should be most responsible, and just 9% say it’s the responsibility of employers.
[survey data] who do you think bears primary responsibility for making sure you can manage the increasing cost of living? (all ages)
- The government - 53%
- Employers - 9%
- Myself - 31%
- My family (spouse, extended family) - 6%
- Charities/third sector - 1%
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 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 in the UK are already seeing more support from their companies, including 10% who say they have received pay increases outside of their usual cadence of annual reviews, and 7% 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.
*Findings from the Randstad Q4 Workmonitor Pulse survey of 7,000 workers in the US, UK (2,022 responses), Australia, Germany and the Netherlands