We are living in an unprecedented time with the rising interest rates, inflation, and forecasts of an upcoming recession. 

In the last two years, some organizations have experienced tremendous growth and expansion where others have unfortunately experienced the opposite, having to close their business or pivot to maintain operations. Regardless of the organization’s financial state, employers in all industries are facing an increased pressure to raise wages across all levels of the organization. Not only are salary reviews expected from employers, but there are also the additional pressures of highly competitive labour markets, and other factors that impact the world of work. 

As we move into 2023, compensation and financial rewards will be a big part of an employer’s competitive talent management strategy. Today’s labour market is extremely challenging, and employers do not want to run the risk of losing talent over a salary issue. However, many still face financial pressures and are not able to translate that salary increase to the client fees and overall product offering.  To retain talent, many employers will need to get creative and offer an incredible value proposition and total rewards offering to their teams.  

So, what should employers do? 

Firstly, it’s important to engage in salary market data to ensure that you are offering competitive salaries. If your market research indicates that you should increase your employees’ salaries, you will need to be mindful of internal equity. Salary increases need to be consistent, and thus fair, across all levels of the organization.  Education is key in being transparent with your team members as to where you may align or misalign with salary gaps and the organization’s plans to close those gaps creatively in both the short and longer term. 

Do you know what your employees value in terms of working for you?  

If not, it’s important and key to retention that you ask and hear their input. Conducting an employee survey is always a good idea, and the best way to guide your retention strategy. Post COVID, employees have been re-evaluating what they seek from their employer – it is not always about salary. Some may be seeking more flexible work arrangements in exchange for higher salaries. Others may be wanting an increase in salary to offset rising food costs. You won’t really know unless you ask! Many employees have experienced “covid clarity” where the most important piece for them is to have alignment with their personal values and the values of the organization.  When it comes to meeting the expectations of your employees, communication is key.  

What if employers can’t afford to increase wages this year? 

This situation is common, as it has been a tough year for many businesses. To address this, employers need to get creative and think outside the box to recognize and show appreciation to their employees. Some ideas to consider are employee recognition programs, engagement initiatives of professional development offerings, ad-hoc bonuses for a job well-done, gift cards, or longer-term rewards programs.

Expressing authentic and sincere ongoing appreciation and gratitude for the efforts of your employees goes a long way. Providing ongoing feedback, checking-in, creating a positive culture, and supporting your employees has been shown to be the ultimate key to retention.  

The HR consultants at LD Human Resources are here to support employers in their compensation strategies and beyond. Need help getting started? We welcome you to reach out to us for a complimentary consultation.