By Jennifer Floyd, SPHR, SHRM-SCP
Rising inflation is outpacing worker wages and frustration is mounting among employees and employers.
The U.S. Bureau of Labor Statistics reported the average weekly wage in March was up 5.6% from a year earlier. Typically, this would be cause for employee celebration since benchmark annual merit pay increases are historically 2% to 3%. But in Grinch-like fashion, consumer prices rose 8.5% during the same 12-month period, effectively stealing everything from beneath the tree to ensure no joy in Whoville.
To ease worker frustrations, HR executives and people managers should educate employees of the realities at hand. Reminding employees of how much more they are earning — and how it will remain in effect long after consumer prices have subsided — may instill calm in the workplace.
Implementation
Because pay and benefits differ for each person, it’s important to use broad messaging in group settings and reserve discussing specific dollar amounts in private, one-on-one meetings.
A few tips for ensuring effective outcomes are:
Be Proactive
Meet with employees individually and in groups by department. Keep messaging consistent and positive — but always realistic. If the company expects a long, tough road ahead, be upfront with employees and explain what is needed of them to get through. This is also a time for employers to listen. While rewards for worker loyalty and perseverance through hard times will be expected, it may not always be pay that is most desired. Listen intently during your employee meetings to understand what individuals want and need most from the company and let them know that you heard and that their time, energy, patience and loyalty will be rewarded.
Be Transparent
Employees want to know if pay increases will happen and when. That’s a reasonable expectation. When talking to employees about their pay, it’s important to remind them of company/department goals in addition to individual performance so they have a larger view of the company’s overall performance in relation to their pay adjustment. The more transparent companies can be with employees regarding their pay versus expenses, the more employees will feel vested.
Prepare Managers
Global research firm Gartner says 47% of employees prefer to hear about pay from their direct managers. However, many managers are uncomfortable discussing pay. One of the ongoing responsibilities for HR professionals is to ensure that people managers throughout the company are adequately trained to confidently discuss pay with their subordinates and, for the near future, how it is impacted by inflation.
Don’t let inflation frustrations tamp down the benefit of receiving a merit pay increase. Help employees understand the economics at work so they can have some well-deserved satisfaction in their wage increase.
Jennifer Floyd is one of South Carolina’s most trusted HR authorities. She owns HR Experts on Demand, is a Registered Corporate Coach and serves as president of the Greenville chapter of the Society for Human Resource Management.
