‘Forecast inflation increases will add wage pressure in an already candidate tight market’
After attending a QLD Leaders industry expert lunch recently, I couldn’t stop thinking about retention, retention, retention.
An economist at the lunch predicted a 4.25% inflation figure (a big jump from almost nothing over the past 2 COVID years). Inflation has been low the last few COVID-19 years, so I think it is important to consider how will this affect my business?
The Consumer Price Index (CPI) is a well-known indicator of inflation and although not a legal requirement to change wages, historically increases lead to wage increase expectation. Often CPI increases lead to minimum wages and Award wages increasing proportionally and these increases flow through becoming an expectation to non-award employees.
We are still living in an uncertain environment, new COVID waves and supply chain concerns. What is the “new-normal” way of managing our businesses and teams? Domestic and International borders are opening, but we are still seeing demand outweigh supply in the current talent market. Finding fit, healthy, let alone talented candidates remains extremely difficult through the first quarter of 2022!
So how does retention tie into this?
It’s quite simple really, increased inflation will likely lead to wage pressure in what is a very tight candidate market. As fear subsides and we settle in to the new normal, lucrative, and exciting opportunities will likely present themselves to our best employees! For those of us that have been searching for talent in the market for prolonged periods, the thought of losing our high performers is terrifying!
Retention is going to be essential in 2022. I have seen business owners and senior managers start to become complacent, staff turnover has been relatively low across the last few years.
Ask yourself is this due to good management or COVID fear?
This year specifically, we must focus within our workplaces, who are our critical employees and what deliberate actions are putting in place to make sure they continue to remain engaged, challenged and developing. Is your team connected to your greater purpose? Are you providing flexible work environments now you have trialled them? Do you have a surface culture or is it sustainable? Are you and your managers gathering feedback effectively?
These are the questions we are asking internally and to our clients, please make sure you take a moment to assess your retention strategy in 2022
I would love to hear from Business Owners, Senior Executives and HR professionals on your thoughts and methods you are using to retain your employees in 2022.