Retaining talent amid the cost-of-living crisis

Retention is imperative in the current competitive workforce. However, with many struggling to make ends meet as inflation and a rising cost of living hurt many, employers may need to look beyond monetary offerings.

Economical pressure is putting strain on employees who are forced to look elsewhere for increased salaries. This can hurt the organisations who can’t afford to offer competitive wages.

“Cost-of-living pressures continue to weigh on Australians, with many feeling financial strain as a result of their pay packet no longer stretching as far as it used to. While some workers will try to curb their spending as a result, others will look for ways to increase their income, potentially looking for a new role with a higher salary,” said Indeed workplace expert Lauren Anderson.

“Indeed’s recent Workplace Wellness Report noted that 50 per cent of Australian workers surveyed intended on seeking a new job in the next 12 months, with pay and compensation ranking as the main catalyst for their job search.”

She continued: “Employers who are feeling financially lean in the current economic climate and therefore unable to meet requests for pay rises, may find that turnover and instability within their organisation increases as employees seek new, higher-paying roles.”

Benefits reign supreme

Retention is always important, but it may take a dive during times of economic hardship. This is where benefits can shine, and provide incentives for employees to stay without breaking the bank.

“Many businesses will also be feeling financial constraints in the current economic climate, potentially unable to offer pay rises to match inflation or beyond. If pay rises are not feasible, offering non-salary incentives like flexible working, additional holidays, professional development, subsidised travel packages and employee assistance programs with access to mental health services, legal assistance and financial advice, can support employees experiencing periods of financial strain,” noted Anderson.

“By offering a combination of these non-monetary benefits, employers can demonstrate their commitment to supporting employees’ wellbeing and satisfaction, even when pay rises may not be possible. This can help foster loyalty, engagement and retention in your workforce. Essentially, creating a culture of growth, flexibility, and wellbeing can play a pivotal role in retaining staff during economically challenging times.”

Eliminating dissatisfaction

Stamping out dissatisfaction at the root can be an effective way to retain skilled talent. As a leader, keeping your ear to the ground and acknowledging the wants and needs of your workforce can help to create a healthy work environment that employees want to be a part of.

Anderson commented: “Dissatisfied employees seeking growth, better pay, work/life balance, or recognition are more likely to consider leaving a role. There’s often no single reason that prompts employees to look for new work, but rather a combination of factors that push a worker into a job search. According to Indeed research, 23 per cent of Australian jobseekers admitted a salary increase was their primary motivation to look for a new job – this is likely to be a key reason for those who are currently under financial pressure due to inflation and interest rates.”

“However, 20 per cent of jobseekers also say that exploring alternate career paths is also a factor, as is looking for new workplace experiences (19 per cent), aiming to further develop their skills (19 per cent) or to advance their career with a promotion (17 per cent).”

“By fostering a positive work environment, offering competitive compensation, promoting career development, ensuring work/life balance, enhancing recognition and providing support during personal transitions, employers may be able to retain staff, even when things are economically tough,” she said.

Upholding morale

Morale is essential for maintaining happy workers. Leaders should understand and leverage this to help keep workplaces running smoothly.

“In times of economic uncertainty, leaders play a pivotal role in boosting employee morale and resilience within the workplace. Indeed’s research has found that employees tend to thrive in a supportive workplace culture, where there’s a clear sense of purpose, job satisfaction, and a predominantly positive outlook,” Anderson explained.

“Workers in this environment are more likely to focus on the positives, rebound from challenges, and form positive relationships with their co-workers. Leaders can enhance morale in their workplace by creating an environment that prioritises employee wellbeing and encourages strong connections among team members. By creating a culture where employees feel supported, valued, and motivated, leaders can promote a sense of stability within the business.”

She concluded: “Recognising the importance of employee wellbeing and investing in initiatives that support professional growth and personal fulfilment can significantly enhance employee morale and job satisfaction, thereby reducing turnover rates and strengthening workplace culture.”