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My continuing conversations with market leaders have confirmed:
While it’s a lagging measure, the latest Wage Price Index (published today) = 2.4% pa (under half the current CPI rate). The increase a year ago was 1.5%.
Now that our business conditions are currently free from the lockdowns of 2020-21, many employers are capitalising on the revelations of operational agility and more effective employee communication. However, there are still serious challenges ahead – much more than just picking the right salary budget increase. With the ongoing disruptions to employment conditions, business leaders must do more than react – they must plan for a range of economic and industrial scenarios.
Last year, COVID-driven conditions promoted employment innovations in many companies. In this current post-lockdown period, with war in eastern Europe, continuing supply chain disruptions (eg. lack of semi conductors), increasing inflation and volatile share prices, many employers need to re-evaluate the best method of rewarding their people. Without a well-informed remuneration strategy, many companies will suffer falls in employee engagement and lose their best people.
The drivers of a remuneration strategy generally include:
Given the employment challenges that lie ahead, every enterprise must be diligent in developing business and people strategies that will address the possible range of economic and industrial scenarios. A nimble remuneration strategy that caters for these scenarios will help engage employees with organisation goals, and focus them on what matters most for business and personal success.