When it comes to supporting employees through the cost of living crisis, you may be tempted to offer employees an attractive cost of living bonus to help cover household expenses.
A quick dive into our candidate community, showed that the majority would be in favour of this benefit, however what would it mean for you as an employer from a recruitment and retention perspective?
How a cost of living bonus could impact businesses and recruitment
Of course we’re seeing a small increase in the amount of candidates entering the market to gain a higher salary (some with the intention of being counter-offered by employers). Offering a one off bonus could help to retain some of these employees during the short-term, however what’s the bigger picture?
Would a bonus address salary challenges during the long-term? Likely not.
Whilst a cost of living bonus is great in the immediate term, employers should consider this alongside reviewing internal salaries against market averages and the cost of living, making adjustments to support long-term talent retention.
Brand image boost
Showing that you’re conscious about challenges which your employees may be facing outside of the day to day is great for brand culture and talent attraction. However, long-term the employees of today (especially younger generations) want this to be backed-up by consistent actions. A one off bonus is great, but ensuring your employees are paid fairly in the longer term is even better.
Crossing a work/life boundary
To what extent should employers be responsible for their employees personal affairs?
Some will question whether the cost of living crisis is the responsibility of employers to solve. It’s a fair question to ask, but we believe flipping the mindset towards ‘what happens if I don’t do anything?’ is a more important question.
A failure to address poor salaries in relation to the economic climate now could result in some huge challenges around recruitment. Talent retention will become a challenge as employees seek higher salaries and talent attraction may become harder as competitors shift pay packets in line with market needs.
When it comes to cost of living bonuses. They’re great, but employers should be looking at the longer-term picture as opposed to a quick fix.
As specialists within the marketing, digital, creative and sales space, we’re always working to stay ahead of the curve in the latest salary developments. So if you need a chat about salaries and how you can attract and retain employees during this period, then we’re your go to team!
Header: Image adapted from Photo by Eunice Lui: https://www.pexels.com/photo/man-in-white-dress-shirt-sitting-on-black-and-white-tube-chair-931887/