Firms are increasingly offering employees sweeteners including flexible working, personal leave and mental health supports to keep them happy at work. But can they replace a good old-fashioned pay rise, particularly as inflation nears double digits?
Recent research by global recruiter Robert Walters has found that workers are going through a trio of life crises, leading to a “great reshuffle” in the jobs market.
The rising cost of living, the growing importance of mental health and the need for “purpose” in work is driving people to seek out companies that can offer them more.
Professional services firm Grant Thornton – which announced last year that it is hiring an extra 1,000 staff in Ireland – is now offering time off for fertility treatments and compassionate leave for the loss of a pregnancy, and has updated its surrogacy leave policy.
“What it is doing is us trying to make working life more appealing to everybody, to ensure we do get more staff,” said Sinead Donovan, partner and chair of Grant Thornton.
“It’s not just the retention or attraction piece that is important to us. That, obviously, is very important, but it’s more to ensure that our employees feel able to voice their challenges.”
Grant Thornton is not the only Irish company to bring in more family-friendly policies in an effort to woo workers.
In January this year, telecoms provider Eir introduced fertility, pregnancy loss, menopause and domestic violence policies.
Tech giants Apple, Facebook and Google announced as far back as 2014 that they would help staff pay for fertility treatments, including egg freezing.
“Anything that is going to support females coming back to work is going to be advantageous,” said Moira Grassick, chief operations officer at business advisory firm Peninsula Ireland. “All of these things make you more attractive when you are trying to put your company above everyone else.”
But she warned that extra leave may put some women at a “slight disadvantage” when it comes to calculating the gender pay gap, which large employers must do from this year.
Employers should also be trying to get ahead of Government moves to improve workers’ rights, Ms Grassick said, with draft laws on the right to remote work, statutory sick pay and domestic abuse leave nearing their passage through the Oireachtas.
“It’s also a sign for your employees that you are being proactive and making it a good place to work. The recruitment market is really tight, and it’s important that you retain the staff you have.”
So do these policies actually help attract and retain staff, or are wage rises going to prove the main sweetener?
Public sector unions are set to begin formal talks on a new pay deal with the Government this week and are seeking increases of 8-10pc.
Private sector workers are already demanding – and getting – higher wages to cope with inflation, which hit a near 40-year high of almost 8pc in May.
Tesco recently announced a 10pc pay increase for Irish staff over three years.
Sectors that were not in lockdown last year saw average weekly earnings rise 5.9pc in the first three months of 2022, with financial, insurance and real estate pay up 22.7pc, the Central Statistics Office said.
Sweeteners such as flexible working, office fruit baskets or compassionate leave “don’t 100pc replace higher pay but can go some way”, Ms Grassick said.
Robert Walters Ireland managing director Suzanne Feeney said recently that employers should not “get dragged into a wage-price spiral whereby they find themselves fighting against a somewhat unpredictable inflation rate” and should look at other benefits instead.
“Employers should look at how else they can add financial value to their employees’ lives, such as small things that can take the burden off day-to-day living costs. Breakfast provisions, fruit baskets, snacks and drinks will be appreciated.
“Also consider pushing the flexi-working agenda further and allowing your staff to travel in on off-peak trains or once traffic has died down to alleviate high fuel costs.”
Economists and central bankers are not yet worried about too-high wages fuelling extra spending and even higher inflation, but Finance Minister Paschal Donohoe is.
He warned this week that the next Budget can’t become “part of the problem” when it comes to rising costs, and said there were “limits” to what the State can do to help offset inflation.
But with the job vacancy rate more than doubling since the start of the pandemic, firms – especially larger multinationals recruiting from abroad – may find it difficult to resist significant pay hikes, especially as housing costs in Ireland continue to mount.