How Great Employers Respond To Soaring Inflation
It's a Friday afternoon. Autumn is here and the days are growing colder. I'm standing next to another father as we wait for our kids to come out of school. Our conversation? “Pretty cold eh, this morning? I didn't turn the heating on though, because it’s so darned expensive!” Sustainability has taken a backseat in our conversations. Then the children run to us, drawings in hand, chattering with excitement about their day, their play dates and their mates.
A summary of these ‘parental conversations’ is that, although we whine about increased energy bills, financially we are managing reasonably well from month to month.
Not all that long ago, this was true for most Dutch folk. But now there are more people who cannot get by financially. The weekly shopping is more expensive. Energy prices are still rising. Inflation is expected to jump >10% this year.
As an employer, how should we respond in light of these developments?
These scenarios were unimaginable in the Netherlands until recently. Some people with good jobs are now nevertheless knocking on the doors of food banks. Why? Their salary isn’t rising in line with the price of groceries.
And some of the elderly are literally out in the cold. Their energy bills have doubled or even tripled. It's not hard to feel a sense of gloom.
Taking care of employees
But I’m an optimist by nature. I believe that if everything around us seems dark, there are always those who will rise up and switch on a light, somewhere.
Take Maurice van den Bosch for example. He is chairman of the board at the OLVG hospital in Amsterdam. In September, he launched the #geencollegaindekou (which translates as “Not leaving colleagues in the cold”).
He did this on Twitter, calling on medical specialists and fellow directors in the healthcare system to deposit €5,000 of their own money into a foundation to help care workers in financial need. He tweeted: "If 1,000 colleagues respond, we can start the fund with 5-million-euro."
Within days, dozens of people and departments had made contributions. Within a week they collected around 250,000 euros!
There are more examples of employers who don't feel comfortable if their employees can't make ends meet.
A software company in Alphen aan den Rijn is giving every employee employed in 2021 or before an extra €500 each month in salary.
The amount of the current salary isn’t relevant. Everyone gets the same amount, which means employees with a lower salary benefit more relatively. Employees who were employed after 2021 have already received a higher wage to compensate for inflation.
Their employer, Machiel van der Schoot, explained via local media channel Omroep West how he arrived at these measures. "I read in the newspaper that prices were skyrocketing. It didn't feel right that the company was growing, but my employees had increasingly less money left over to spend."
Family business Klok Holding also responded to the financial woes of employees. Since summer, all 530 employees have received a monthly allowance of 250 euros before tax.
Owner Ton van de Klok told NOS: "We’ve been able to take this family business forward successfully in line with the times. This is thanks to our employees – which is why we think it's important to give something back when possible. Ultimately, this will boost the mood of the workplace and have a motivating effect."
Employment lawyers may tell you that an employer is not obliged to compensate workers for higher inflation. But being a good employer isn’t solely about obligations.
You only achieve your own hopes by giving the very best service to your customers. This is more likely if you put your employees first.
‘People first’ is our Viisi company philosophy. Our position is, if you don’t change anything about salaries during this time, you are effectively giving your staff what amounts to a pay cut.
Of course, no employer can open the money tap arbitrarily. We had to take a good look at what was feasible. A completely transparent salary model certainly helped. Each employee receives a fixed salary increase every year. And an inflation adjustment is made in January.
Because our Viisionairs are now feeling the pinch of rising prices, we brought forward this increase. Instead of January, everyone will now receive another 5% from November onwards. In January, we will look again at the situation and make further adjustments, as possible.
Meanwhile, we’ve approached each colleague with a questionnaire to learn if and how inflation has caused them financial problems at home. Those in acute need can mention this confidentially to our People First team. Then we can arrive at a suitable solution together.
Because, if there is one thing I believe in, it’s that together we can continue to keep that light switched on.
This is a guest post from Marc Peter Pijper, Holacracy Coach at Viisi, a financial services company that offers customized mortgage solutions for highly educated customers. For more information on Marc Peter and the company, check out his rebel page.