The number of HR decision-makers (HRDMs) expecting business conditions to get worse this year has now DOUBLED, new insights have revealed.
The ongoing cost of living crisis, soaring inflation, rising energy bills and challenging business conditions have forced thousands of UK HRDMs to make tough choices on employees’ futures, and to be more creative around staff pay and rewards.
The new insights* show the number of HRDMs anticipating a decline in business performance doubled to 6% in November 2022, from just 3% in May 2022.
The research also revealed that three in four HRDMs are now having to find ways to navigate a series of challenges in their organisations, to help manage costs and find new methods of recognising and retain staff.
More than one in five HRDMs say they are having to let go of employees (21%) and many more are looking for ways to ramp up support for existing employees amid shrinking budgets. They are trying to retain talent through higher salaries, bonus payments, enhanced rewards and recognition, and access to new discount platforms and schemes.
According to the research, salary increases (45%), increased staff rewards (39%) and improved benefits (39%) lead the way in terms of how HRDMs are providing support for employees during the cost of living crisis. The next most popular methods were one-off payments (35%) and access to discount platforms and schemes (23%).
“These new insights show the cost of living crisis is hitting many businesses hard – for some it’s as bad as it was following the Covid pandemic. However, HRDMs are facing this challenge head-on and finding new and innovative ways to support their employees,” said Frank Creighton, Director of Business Development at Appreciate Business Services.
“It’s a challenging market for HRDMs prompting many to think more innovatively and creatively by exploring alternatives to inflation-linked pay rises, through better rewards and recognition platforms, discount schemes for staff to offset squeezed household budgets, and enhanced benefit packages.”
Appreciate Business Services, the UK’s leading employee and customer engagement company and the home of Love2shop, is currently working with hundreds of UK HRDMs and Sales and Marketing leaders to explore new and innovative solutions to reward and recognise employees.
It works with HRDMs in a range of sectors, including professional services; financial, insurance and pension companies; wholesale, retail and logistics; health and social care; education; and the automotive sector.
Its wide range of Love2shop offers a choice of multi-retailer gifting rewards, helping businesses attract and retain employees.
It is also helping many HRDMs to integrate a new Employee Discount Card scheme into their organisations, with the new Everyday Benefits Card helping staff save 7.5% on their day-to-day spending at more than 90+ leading retailers, including supermarkets to help with everyday essentials.
And through its intelligent, award-winning Appreciate Engagement Platform, Appreciate Business Services is enabling HRDMs to plan and launch incentives, engagement and employee recognition and reward programs with minimal effort.
Laura Maguire, Head of Research and Insight at Republic of Media, said: “These insights prove that in many ways, HRDMs are on the front line of the cost of living crisis, tasked with finding ways to attract and retain talent in a challenging economic environment.
“Building on these statistics and this piece of work, we’re looking forward to seeing the impact of the Employee Discount Card Scheme and Appreciate Engagement Platform when we re-run this research with Appreciate Business Services later in the year.”
Appreciate Business Services’ products are aimed at helping firms as they face ‘Great Resignation 2.0’ this year, a trend that initially emerged early in 2021, in the wake of the Covid pandemic.
That saw millions of workers change jobs or even stop working altogether through retirement or long-term sickness, with the Office for National Statistics having reported that 565,000 became ‘economically inactive’ during that time.
This year, up to a fifth of UK employees will look for a new job in search of a higher salary or better benefits – making the retention of staff more important than ever.
Appreciate Business Services’ team say benefits and rewards will now lead the way.
Their recent Employee Value Report found three-quarters of workers believe companies that regularly gift or reward staff attract and retain a better calibre of employee.
The report found that one-third of all employees in the UK – almost 10 million people – feel undervalued at work, with the report laying bare the scale of workplace happiness.
Frank Creighton said: “A year ago, there was a degree of cautious optimism throughout the economy but within months, market conditions were beginning to be severely disrupted following Russia’s invasion of Ukraine.
“Despite the ongoing economic challenges, businesses can mitigate the potential fall-out by focusing on their people, whether that’s their immediate employees and customers or their broader external network of partners or resellers.
“Evidence is mounting that people are becoming more selective when it comes to where they want to work and how they spend their money. Genuinely forward-thinking, evolving businesses will reap the benefits if corporate and consumer loyalty and redemption strategies are positioned to capitalise on the transformed workplace when the economic upturn comes.”
The report also found that 41% of those who feel undervalued in their job believe regular rewards from their employer would give them a great sense of value. Additionally, nearly half said their output and productivity decreases when they don’t feel valued by their employer.
Nearly four-fifths (79%) of those undervalued employees said they were looking for a job elsewhere, with the figure increasing to nine out of ten among the 18-24 demographic – the youngest surveyed.
Surprisingly, just 12% of employees strongly agreed that their employers are generous.
Mr Creighton added: “It is abundantly clear that rewards and incentives must play a central role in seeing businesses through the challenges of 2023.
“By showing employees they are truly valued you can make significant steps to retaining the talent you need to emerge from this recession strongly.”
*Commissioned by Appreciate Business Services, the UK’s leading provider of rewards and recognition solutions for businesses, in collaboration with Republic of Media and Panelbase