Managing the impact of inflation: the results are in

December 13, 2023
min read


Table of contents


Managing the impact of inflation: the results are in

A global pandemic… the Great Resignation… and now the Cost of Living Crisis. Business leaders are navigating huge challenges in the current economy.  “As employee voices on compensation and cost of living rise to a roar, we asked more than 200 founders: what are you doing about this?”

Our latest survey consulted more than 200 business founders and People leaders from all over the world. We asked whether they’ve adjusted salaries in line with inflation and, if so, then how much.  We asked if they’re making one-off payments or running other initiatives. Then we analysed the results to find out what’s happening in the US compared with Europe.  Here’s what we found out.   

A “wait and see” approach

The current economic climate feels chaotic. Some companies are scaling up while others downsize… and many are hovering in uncertainty. We asked: Are you taking action on inflation yet?

20% said NO. 38% said YES; but 40% said they aren’t sure right now.  

Why the wait? CEO of Figures Virgile Raingeard says: “Most company and People leaders haven’t seen anything like this before. People are holding off because they don’t know what to do, and they’re waiting to see how other companies will act.”

What about those who say they aren’t changing anything?  They may simply be confident that their compensation structure already works. Like Whereby, Oyster has a salary model which accounts for market conditions as well as performance.  Head of People Experience Kim Rohrer explains, “This way, we can stay programmatic, objective, and consistent, rather than being reactive and perhaps less able to sustain our growth.”

Our survey revealed an interesting difference in global decision-making: in the US, 75% of respondents are tackling inflation now – but in the UK that figure is at 59%.  The size and maturity of company also matters, with more of the larger, established businesses appearing in our ‘yes’ column. 

What action looks like

Right now, there are two main courses of action for leaders: increasing salaries or offering one-off bonuses. Of those opting to raise salaries, 40% are making an immediate increase and 32% said it will be a gradual incline.  9% of respondents are making single support payments. 

At AREX Markets, Julio Hailo is concerned about retaining employees. “I'm currently arguing for an increase of our home office allowance, ideally with a lump sum that would be retroactive to the beginning of the year with the amount being adjusted if necessary every semester.”

If your budget won’t stretch to full-scale pay rises, you could consider an eligibility-based scheme or benefits package. In the new e-book, our experts outline a comprehensive approach to help you decide how your company should respond to inflation.  

How much is enough?

Among those paying bonuses, we discovered that 57% will pay up to 3%, with 43% going up to 5% of annual salary. This could be a result of government incentives (with most EU countries running some kind of tax break for bonuses); it could also be a reactive measure while our businesses “wait and see”.

What are the average levels of salary increases?  We asked our respondents how much they’ll raise salaries (and whether they’ll apply it across the board) – and you can read the results in our free e-book

Download it now to read the survey results in full – as well as our experts’ recommendations to help companies of all sizes.  There’s an actionable checklist that you won’t want to miss.

Join the Compversation

Subscribe to the most read bi-monthly newsletter by the French Comp & Ben

Work email
Thank you! Our team will get back to you shortly!
Oops! Something went wrong while submitting the form.

Build a fair compensation strategy with our all-in-one compensation platform

Get started
Error text
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related posts

Illustration Blogpost

Are You Maximising Your Compensation Management Performance? Don't Get Left Behind!

That means getting compensation management performance right is one of HR’s most important objectives. Here’s everything you need to know about how to maximise this element of HR. 
Read more
Illustration Blogpost

How To Define Your Salary Increase Budget

One of the most essential parts of the compensation review process is defining your budget. And exactly what this process looks like is different for every organisation, because your overall compensation philosophy should underpin it. That said, there are some guidelines and standard practices that most companies abide by — read on to learn more. 
Read more
Illustration Blogpost

How Compensation Reviews Impact Your Company Culture (and Vice Versa)

In this article, we’ll dive into the link between company culture and the compensation review process — with a little help from our friends at Mo, an employee reward and recognition platform in the UK.
Read more