More than half (56%) of employers have offered financial remuneration to help employee retention during the cost-of-living crisis and staffing shortages, according to research by Peninsula Group.
The employment law, HR, and health and safety services firm’s survey of 79,000 small to medium-sized businesses (SMEs) across Australia, Canada, Ireland, New Zealand and the UK also found that 65% of Canadian employers offered financial remuneration to help retention, which was more than the other countries to do so.
Those that were unable to give financial incentives turned to reward and recognition to aid retention, with a 131% increase year-on-year. Mental health support was the second highest retention aid in the UK as 49% of employers continued to offer this, which was an 8% increase year on year.
A quarter (26%) listed recruitment as their biggest challenge in terms of staffing, with pay increase requests ranked second at 22%.
Meanwhile, only 2% of SMEs globally moved to a four-day working week. A further 1% had trialled it and found it did not work for them. Half of employers said their employees are in the workplace full-time, 15% have flexible working hours and 11% have made hybrid working a permanent policy.
Alan Price, chief operations officer at Peninsula Group, said: “Employers feeling the financial pinch are turning to reward, recognition and enhanced benefits instead of financial remuneration to aid retention in tough economic times. Here in the UK, there is concern among small business owners around the affordability of pay raises, with a huge jump to national minimum wage and national living wage due in April.
“It’s clear that this will be a tough year for many businesses, but there is also a mood of opportunity. Employers are seeing the value in retaining employees and, in turn, employees are reaping the benefits. More than half were given a pay raise and employers are looking at creative ways to retain employees, such as flexible working where a pay raise is not possible.”