Salary and Benefits in the Business Travel Market

Inflated or merely keeping up with inflation?

Are staff using the current talent shortage to leverage their pay, whether at point of recruitment or in asking for a raise? Or are people merely trying to keep up with the escalating cost of living? With inflation at 10.1%, a pay rise of 10% (previously a very healthy rise) is not even keeping people even.

So, what are you doing to help your staff with the cost of living crisis?

This week, Nationwide announced that it will pay more than 11,000 of its staff £1,200 to help them cope with Britain’s mounting cost of living crisis (the offer will be made to staff making less than £35,000). Lump sum payments to staff have become relatively commonplace and are seen as an immediate and effective support mechanism.

In the three months to June 2022, total pay in the United Kingdom grew by approximately 5.1%, while regular pay grew by 4.7%. When this is adjusted for inflation, however, total pay fell by 2.5%  while regular pay shrank by 3%. And this deficit will increase with inflation set to rise further, so staff are facing a continuing cut to their income in real terms.

First, acknowledge that different employees will face different impacts from the situation, and this may affect what they need from their employer. Some employees may be concerned about rising energy costs so may prefer to come into the office more often, whereas others may benefit from remote working as this reduces their transport costs. It is important for an employer to engage in communication with employees, so that employees can voice their concerns and opinions. An employer should be flexible and discuss how they can best support their employees. An employer should ask employees how they can best support them through this crisis whilst also recognising that they do not have a bottomless purse.

One way to provide support is reminding employees about (or introducing) discount platforms that can help them save money on retail spending. Or an Employee Assistance Programme? An employer could refer the employee as this may include mortgage advice, financial planning and debt management as well as other non-financial issues. An employer may wish to consider offering counselling to help manage the emotional challenges that often accompany financial difficulty. Offering staff benefits that reduce the costs of living e.g., health cash plans either covering or paying money towards the cost of everyday healthcare will be helpful.

Companies can look at salary sacrifice schemes – also known as salary exchange, salary sacrifice is an agreement between you and your employee to reduce their pre-tax annual salary in return for receiving a non-cash benefit, i.e. goods or a service. Most commonly employers offer childcare, healthcare, transport, and increased pension contributions.

There may be schemes that already exist within the business which employees don’t know about, and HR has an important role here in communicating what is available and encouraging uptake. It would also be beneficial to use communication channels and encourage managers to signpost employees to sources of financial advice and benefit.

Demonstrating that your organisation has acknowledged the current crisis and the impact it has on its employees is key to promoting a positive ethos, helping retain staff and attracting new employees.

Communication and flexibility remain central – treat every team member with kindness and understanding. It’s important not to make promises you can’t keep – but there is a wealth of ways to help your employees through this difficult period. Keep listening, keep helping

This is a huge opportunity to be an authentic employer of choice.