Employees - let’s talk money!

A few months ago, I committed to sharing the good, the bad and ugly experiences on my personal journey as a new MD and the struggles I face running the business, along with some of the strategies that appear to be working in my favour.?

In my last article, I talked about how to keep working relationships happy, how to get that all important personalisation and connection with your teams and how to measure what matters.?

Today we are talking ‘money’ and having meaningful conversations with staff about how you intend to support them through the cost of living crisis. It’s not something that any business leader can ignore.?

Inflation. An energy crisis. The likelihood of rocketing interest rates. It’s no surprise that financial pressure is now the leading cause of stress outside work for UK professionals.?

A recent report found that over a third (34%) of employees feel stressed about their finances, with 15% reporting that the worry is affecting their productivity.?

But the current economic crisis is also having a significant impact on your businesses. Lending will become tighter, borrowing costs will rise and imports could become more expensive. Interest rate rises could pile additional financial pressure in the future. This includes those with debt from emergency Covid loans and commercial mortgages.?

Your staff have read the news.?

Banking groups Lloyds, Nationwide and HSBC and airline British Airways have offered employees up to ￡2,500 in bonuses, while food company Heinz offered staff an 11% pay rise to offset living costs.?

Don't get me wrong, we all know that one of the best ways to show appreciation for your employees is to pay them more, but understandably many businesses aren’t in a position to give staff large pay rises at the moment.?

It has the risk of putting the company out of business. This is not being over dramatic. Businesses exist to make profit and if we all gave 10-20% pay rises in line with inflation we’d be in trouble.??

We need profitable businesses to keep our valuable employees in work.?

Pay rises simply won't equal out inflation. They will result in further inflation - it means prices have to keep going up, simply escalating the problem, which for me is just not a responsible way for business leaders to behave.?

My advice, if you can afford it and wish to make some form of monetary contribution, the first thing is to make sure it’s sustainable for the business and won’t harm the viability of the business later down the line.?

Don’t perpetuate the problem?

The most important thing your business is doing is offering employment and supporting staff with personal progression. No business. No employment.?

Here are eight things we are doing at IRIS. For our teams.??

• 1)How about offering staff a cost-of-living bonus, instead of a pay rise, perhaps payable in instalments over the winter months to help with increased household bills.?
• 2)Review what employee rewards/benefits packages you offer. And then update. If they aren’t being used see if you can swap out for initiatives that may be more meaningful right now.??
• 3)Look at what sort of financial advice you might be able to make available. Do you know an independent expert that can give advice on budgeting and other ways to save money – water, energy, refinancing, reducing waste, etc.?
• 4)Have a look at your employee pension contributions. To deter staff from opting out of their workplace pension scheme, you could perhaps offer a pension payment holiday or look to increase your employer contributions.??
• 5)How about Earned Wage Access - a new payroll scheme allowing staff to access wages before payday. It’s helpful for those experiencing financial stress and to prevent employees from taking out a high-interest payday loan.?
• 6)And get your payroll right! It can be very frustrating to be taxed too much, have something missing from your salary and not have your expenses paid on time.?
• 7)We need to provide whatever it takes for individuals to feel that they can work. WFH… Flexible hours… A shorter working week… Part-time... Rapid access to training opportunities… etc.?
• 8)Training budgets have really suffered during the last few years. Find new affordable ways to provide training. It doesn’t have to be expensive, face-to-face, etc.?

Think twice before offering huge pay awards.?

Think about the best place for this cash to go, for the long-term prosperity of your business and your most valuable asset, your staff. When things stabilise the big pay awards can return but until then, you don’t know what’s around the corner.?

It’s absolutely possible to have meaningful cost-of-living conversations with your staff. Just be realistic about what you can offer or it may come back round to bite you on the bum.?

Until my next instalment, over and out.?

Steph x?