Staggering rates of inflation are impacting consumers and companies alike. Currently, America battles inflation standing at 9.1%, the highest it’s been since the early 1980s. Rising consumer costs are fueling the drive for workers to seek higher pay.
How can your company adapt to the challenges brought on by historic inflation? Here are six tips for learning to thrive even when the economy takes a downturn.
1. Streamline and Automate Processes
A little organization goes a long way. As inflation continues to climb, you should re-examine your core business processes. How can time-intensive work be automated? Is there software that can be deployed to automate business processes like scheduling, order taking, billing or collecting payments?
Automation makes these tasks faster and more efficient and can potentially eliminate the errors that creep in from manual data entry.
2. Improve Productivity
Automation can go a long way toward improving the productivity of your workforce. But it’s also just the start. Some software platforms allow you to track worker productivity and highlight areas to improve. However, be cautious as some workers may not appreciate the idea of having their habits monitored throughout the day. As inflation rises, employers and employees are in this together, so just be transparent with your employees about your intentions and reasoning..
Of course, you can always adopt a low-tech approach. Make a list of all of your business processes, ideally those that you carry out on a regular basis. One way to approach this is to follow the lifecycle of an order and document each step along the way, then determine where inefficiencies exist and where better process or technology can help. Brainstorm ways with your team on where to make improvements, or cut out certain steps altogether.
You might be surprised by how this exercise can save time and money, and it may even boost employee morale by eliminating non-essential tasks.
3. Lower Your Labor Market Risk and Retain Good Talent
Inflation is pushing some Americans to look for jobs with better pay. This is especially true for entry-level, low-wage employees, but it can also impact those with skills in high demand, such as software engineers or web developers.
Now is the time to strategize ways to retain your best workers. This can include higher pay and better benefits, but it might also extend to professional development and other perks that foster loyalty and instill a sense of purpose among your top employees.
Engaged employees are less likely to take their skills elsewhere and will prove to be an asset even after the current inflation period subsides.
4. Offer Flexibility and Remote Work
If there’s anything positive that came from the 2020 pandemic, it’s that the American workforce proved that remote work (or “work from home”) is a viable approach. Even now, many employers continue to allow their workers to adopt a hybrid schedule, working from home for an agreed-upon percentage of the workweek.
This simple perk can go a long way, especially for employees who have to juggle the dual responsibilities of children and career. Additionally, with rising gas prices, American workers can save money by ditching the commute (at least a few days per week) and cutting back on high-priced coffee and meals purchased while working at the office.
5. Increase Workers’ Pay/Compensation
For some, this may sound counterintuitive during an economic downturn. But if you don’t take care of your employees, someone else will. Don’t wait for your employees to specifically ask for a raise. Take the initiative and bump up your workers’ pay to help alleviate the stress of rising inflation.
According to a survey performed by Salary.com, the vast majority of U.S. businesses are increasing their pay by at least 4% this year, and 43% of businesses are growing their salary merit-increase budgets by 5%.
If these costs seem high, remember that the cost of replacing your valued workers is higher still. The Institute for Research on Labor and Employment reports that it can cost as much as $7,000 to replace each skilled worker. Raising salaries might actually benefit your bottom line.
6. Enhance Benefits
Finally, employees may be more likely to remain in companies that offer a comprehensive benefits package. This usually means more than the typical healthcare and retirement plan, though these remain in high demand.
Many employees are looking for non-medical benefits that include things like:
- Paid family leave
- Life insurance
- Disability insurance
- Wellness programs
Even simple things like introducing a “bike to work” initiative or other health and wellness programs can go a long way to improving employee engagement and showing that you care.
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Focus HR empowers small business owners to keep their workers happy, healthy and engaged. If you need HR advice on helping your small business ride this inflation wave, contact us to request a consultation.