What is your HR & People strategy?

Businesses, HR & People Directors face twin pressures of price rises on the one hand and a tight labour market on the other. As business leaders, HR & People professionals, how do you address the challenge of these twin pressures in your strategy?

In February the FAO Food Price Index (FFPI) rose to an all time high. The FFPI measures the monthly change in internationally based food commodities.?Its scale rating went up 5.3 points in February. The Cereal Price Index went up 4.2 points. The average rate of inflation is going up and of course, we are all aware of energy bills and National Insurance contribution rates rising with the new N.I levy coming into effect in April. Even before the current crisis in Ukraine prices were rising. The conflict in Ukraine will increase price pressures further. World wheat prices have sky-rocketed with the Australian Premium White index jumping $28 on 23 February, the day before the Ukraine conflict started, with suppliers looking to replace lost Black Sea region wheat availability. Maize prices are also rising 5.1% month on month. Prices are rising at the fastest in 30 years and this is a key challenge for business leaders, HR professionals and their organisations. The price of wheat, the price of a slice of bread, is on the up and these price pressures are leading to a review of strategy.

With wage-roll making up a large part of cost in many organisations, the link between price hikes and staffing is obvious. In April, the lowest paid will also see the National Living Wage increase to ￡9.50 per hour, a rise of 6.6% and there are likely to be pressures as regards wage negotiations generally. We have already witnessed the acute shortage of haulage drivers and staff leaving jobs to take up better paid driving roles. As regards drivers, there is a similar picture in Europe with Ukrainian drivers returning to Ukraine to support their country. All of this is against a backdrop of ONS figures for February showing a record 29.5 million pay-rolled employees (an increase of 108,000) on the January figure. Job vacancy numbers in January however reached another record high of 1,298,400. Employers generally have vacancies, and many employers simply cannot afford to lose staff.

Business leaders, HR & People Directors face twin pressures of price rises on the one hand and a tight labour market on the other. These challenges raise key questions for leaders. How will you address these challenges of balancing cost against retaining key staff? Will you be reorganising staff, will you lose premises costs and how do you retain key staff through the upheaval of the “Great Re-Organisation”? Have you carried out a recent staff pulse survey and are staff happy with their benefits? Would they like “something else”? And how might you go about creating a culture where staff want to stay in your organisation and so you can continue to attract the best talent?

We’ll be discussing the current strategic challenges that HR & People professionals face in our free of charge, upcoming HR Breakfast, by zoom, next week on 23 March. Take part in the debate, learn key insights from your HR professional peers, and reserve your place here.

Joan Pettingill, Employment Law Partner

+44 (0) 7398 334 777

Email Joan here