Q&A: Should I give raises to match inflation?
The annual rate of inflation in the United States hit 6.8% in November 2021, the highest in more than three decades. Should you raise your employees’ salaries to keep up? David Watson, Product Marketing Manager at Zenefits, shares what you need to know about inflation and advice for how to handle pay accordingly. Additional Resources: […]
The annual rate of inflation in the United States hit 6.8% in November 2021, the highest in more than three decades. Should you raise your employees’ salaries to keep up?
David Watson, Product Marketing Manager at Zenefits, shares what you need to know about inflation and advice for how to handle pay accordingly.
- Order your copy of our book People Operations: Zenefits.com/pops-book
On this episode, you’ll hear:
- [00:30] The state of inflation in the U.S.
- [01:00] How companies are handling compensation
- [01:30] Metrics to monitor
Should I give raises to match inflation. Welcome to pups the show that shows you how to shift from killing resources, paperwork to people, operations for the new world. How by answering one question at a time
Today to help us answer your question. Here’s David Watson, product marketing manager at Santa Fitz. The annual rate of inflation in the United States. It’s 6.8% in November, 2021, the highest and more than three decades as measured by the consumer price index. Many smaller companies tend to mimic the trends of tech giants.
And most recently, a leading tech giant announced that they will not be increasing wages to match in place. Even though they have traditionally been the standard for employee wellness and benefits. So that raises the question for a lot of small businesses. Should other companies continue to look at leading tech giants for insight from a people operations standpoint?
It raises another question on how can I approach. It is certainly situational. I’ve spoken with clients that have actually upped their minimum salaries at the beginning of the year because they saw the trend continuing to go upward. They have taken a proactive approach even with pay scales 2022 compensation, best practices report revealing that 85% of organizations are concerned about rising inflation and eroding the value of those pay increases that a lot of those smaller companies have already put in play, but my recommendations are to monitor the consumer price.
Uh, this is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. And also another thing you could be doing is track your own attrition and identify trends. So what’s causing folks to leave if it gets to that point or are certain departments and roles more impacted than others.
These are some things that I’ve had clients personally look into a little bit more, and this is kind of. Um, make those decisions on whether they should continue to increase the pay for those employees, or if the recent bonuses that they’ve already put in a place are going to be sufficient. And lastly, one thing you can also do is try to highlight certain areas to track in order to gauge if it’s something you need to do.
So again, just look at these previous kind of metrics that I’ve described. And also just find other ways within your organization to identify if this is going to be something that will kind of fall into your plate.
Do you have a question for our experts? Click the link in the show notes, or if you’ve got other ideas and feedback about our show, send them to [email protected]
About The People Ops Podcast
Every week, we share the decisions, struggles, and successes for keeping up with an evolving workforce and a changing workplace. No matter if you’ve been in HR or are just getting started, this combination of transformational stories with actionable ideas, as well as context on hot issues, keeps you up-to-date while answering the questions you didn’t even know you had.
Oh, and you know what they say about all work and no play? We tossed in a little levity to keep it real. Lessons, answers, and humor: everywhere you listen to podcasts.
Best-in-class remote teams will use best-in-class technology.
Zenefits mobile HR platform makes it easier to communicate with staff, onboarding new hires, pay employees, and manage any HR task from any home office.