As the cost-of-living crisis deepens, surveys suggest that half of UK workers want help from their company. But with inflation running at 9.1%, and most businesses also hit by additional costs themselves, this isn’t always possible. At present, there are four pressing matters businesses must deal with.
1. STAFF RETENTION
With a record 1.3 million job vacancies in the UK, retention is one of the biggest problems facing companies right now. Employers are faced with the double-whammy of the ‘Great Resignation’ running parallel to the cost-of-living crisis and there is a concern that if bosses can’t afford to pay their employees more, they may seek employment elsewhere. There are many financial issues for law firms.
Flexible working should be top of your list when considering how to retain staff, as studies show that employees now value work-life balance more than their salary. Based on a poll by payroll software provider CIPHR, over two-thirds (70% of women and 65% of men) see work-life balance as being more important than their pay and employee benefits combined (selected by 60% of women and 57% of men).
In particular, the legal services sector has been affected heavily by this, with 45% of law firm partners citing retention as their biggest challenge, according to a survey by litigation funder Harbour.
For many, pay rises have offered an easy solution to the problem, with firms increasing salaries by 15% to 50% in a bid to retain talent. Top firms have been handing out starting salaries of up to £150,000 to graduate lawyers. Those in business services are also benefitting, with firms such as Slaughter & May having recently reviewed salaries across the breadth of its services.
If you can’t offer staff a pay rise, there are other ways of helping ensure their salaries go further. Employee benefit packages can include salary sacrifice schemes, pensions, maternity/paternity pay, sick pay, travel loans, share options and bonuses. If you are already offering generous benefits packages, it’s worth highlighting this to your employees –employees are more likely to stay with an employer who offers a good benefits package.
Finally, and this is something that doesn’t happen as often as it perhaps should; a “thank you” from an employer goes a long way towards making employees feel valued. It can have a big impact on engagement – and it’s free!
2. MAINTAINING CUSTOMER SERVICE
As well as rising costs and inflation, small businesses are also being held back by poor customer service from suppliers. The research by the business communications solutions provider found that, amidst rising costs and inflation, small businesses are also being held back by poor customer service. 67% of small businesses work with a supplier that has blamed bad service on the pandemic – despite Covid restrictions officially ending six months ago.
Rob Hailstone, founder and CEO, Bold Legal Group explains: “When you apologise to a client for taking so long to get back to them because you were busy, all they hear is that someone else was more important to you.”
Lawyers tend to think in terms of input – the legal advice they can give and its quality. But clients take the quality of your advice for granted. What concerns them is the output – getting a good result and being able to move on. It’s by listening to them that you find out what the client thinks a good result would be – their priorities and expectations. For a client in pain, the longer it takes the longer they suffer.
But it’s perhaps not all doom and gloom. The pandemic saw many SMEs displaying considerable agility and creativity, pivoting to take opportunities when they came up. This was in order to survive – and thrive. While many may have hoped for some respite in 2022, disruption looks set to continue for the time being – and once again, those that are able to display adaptability, and effectively manage their capital to support growth development, are the ones best positioned to meet the current challenges.
3. ENERGY COSTS
The UK energy crisis has had a domino effect across the sector, and companies are in no way immune. The nation’s businesses – especially the 5.3 million micro businesses that total 95% of the country’s business sector – are also facing steeper energy bills, which may pose real problems for their bottom line.
Businesses are affected by the UK energy crisis in essentially the same way as households are. They will be paying far more money for their energy bills. The worry is that they have less protection than domestic consumers when it comes to energy. Namely, the energy price cap does not apply to the nation’s firms, regardless of their size.
Whilst fast-track law supply chains save waste and costs, they also leave companies financially exposed when they break down.
Business energy contracts are typically longer than their domestic counterparts, potentially lasting up to five years. So, for the moment, some businesses that have existing contracts will be shielded from rising prices. However, there will be lots of businesses that need to renew their contacts this year, as well as others that will be on variable tariffs that are already seeing their bills increase.
To combat the costs of the UK energy crisis, there are certain steps you can try to take to reduce your business energy bill:
- Make sure you are being billed correctly
- Improve your business’s energy efficiency
- See if you have a business energy claim
- Check if you are eligible for any business energy grants
While business energy bills are going up, that doesn’t necessarily mean you won’t be able to find a better deal when it comes time for you to switch suppliers.
4. ATTRACTING TALENT
The competition for talent is different now. Employers are competing with the full array of work experiences available to today’s employees. Traditional and non-traditional jobs and, in some instances, not working at all. To keep up, companies must offer adequate compensation and benefits packages. But to win, they must recognise how the rules of the game have changed. While workers are demanding higher compensation, many of them also want more flexibility, community, and an inclusive culture to accept a full-time job at a traditional employer.
Research shows that 25% of the employees who voluntarily left and then returned are at least somewhat likely to leave their current employers in the next three to six months. They know that other opportunities are out there. Particularly in this strained labour market. And they say that if professional development, workplace flexibility, support for mental and physical health. And other needs aren’t being met at one company, they will look for the right conditions elsewhere.
Even more important, talent acquisition teams must find ways to attract latent workers. Those who are no longer in the workforce and are not actively seeking a traditional job at a traditional employer. But who might yet return under the right conditions and with the right offer. Maybe they are burned out and on an indefinite break. Perhaps they left the workforce during the pandemic to take care of their kids. But are considering a return now that schools are getting back to normal schedules. Or they retired too early and are looking for something to fill their days with. By not looking at those actively seeking work, firms are missing out on valuable candidates.
The new competition for talent is not just about employers competing with one another to find the best workers. It’s about employers acknowledging the many choices that today’s workers have. Finding effective ways to compete against all those options. The old playbooks won’t work. Even for those companies that end up figuring out how to bring some people back. There will be inevitable setbacks if they can’t figure out how to retain those workers.
Grapevine Leaders: https://lnkd.in/eS9zJs_g
People Management: https://lnkd.in/ebMRYNcW
McKinsey & Company: https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/gone-for-now-or-gone-for-good-how-to-play-the-new-talent-game-and-win-back-workers