With wage growth at a standstill and financial stress increasing, what can HR leaders do to stop employees from jumping ship and seeking their pay rise from a different employer?
Financial worries are often considered too personal an issue for employers to tackle. But the toll these concerns take on employees’ confidence and behaviour at work, and the impact that income has on their intent to stay, are both enough to make HR leaders lean into the conversation.
A recent study by Willis Towers Watson found that 51 per cent of Australian employees have significant worries about their current financial state, with 41 per cent experiencing concern about their financial future. These worries are also spilling over into work life, with half of employees saying financial stress keeps them from performing at their best, and that they’d move to a new job if the opportunity arose.
Pair these findings with the Reserve Bank of Australia’s recent projections for minimal wage growth and their accompanying advice that anyone after a pay rise should seek a new employer, and you have a perfect storm for a disengaged, highly stressed and unproductive workforce with the potential for high turnover.
For companies that simply don’t have the budget for significant salary increases or major recruitment drives, what can be done to support existing employees and attract those entering the job market? Quite a lot, it turns out.
With innovative HR initiatives, employers can use a fraction of what would normally be spent on remuneration to increase their staff’s disposable income by up to 3-10 per cent — significantly more than the wage growth the Reserve Bank projected for almost all industries.
So how can companies support their employees and — instead of losing talent to competitors — retain and attract staff by standing out in the market as an employer of choice? It all comes down to creating a compelling employee value proposition (EVP).
While salary is a strong drawcard, it’s not the only thing employees are looking for. Employee recognition is high on the list for Australians, with a Reward Gateway study finding that 70 per cent would rather work for a business with a culture where their achievements are recognised than a company where they had a higher salary and no recognition. And, according to the Robert Half 2018 Salary Guide, 84 per cent of Australian workers would take a lower wage in return for great benefits. The good news is, employers can provide all of these things without sacrificing their peoples’ financial wellbeing.
An effective employee benefits program provides a tool to relieve your staff’s financial pressures, enhancing your EVP to both employees and their families.
Giving every employee a 3-10 per cent pay rise would be cost-prohibitive for most companies, but it’s possible to increase disposable income by this much if companies are smart about how they offer employee benefits.
For Australians who are concerned about their weekly budget and are accounting for every dollar saved and spent, introducing benefits to your EVP is a way that employers can make a tangible impact on their staff’s day-to-day spending and long-term financial wellbeing.
Download Reward Gateway’s latest ebook to find out how to implement a cost-neutral or low-cost benefits program that helps your company build a world-class EVP, while alleviating some of the everyday wage worry.