How To Survive in Inflationary Period? The social devastation wrought by the shift away from price stability goes far beyond the “price records broken by tomatoes and peppers” in news reports. The environment of uncertainty created by instability affects many issues from work ethic to employee circulation, from the erosion of workplace culture to the collapse of human resources
The persistence of instability triggers mutual devaluation, making it difficult to do business. Since it will be difficult to manage people in such a period, it is extremely important for companies that HRs develop personnel management strategies specific to the high inflation period.
From past to now, the way news bulletins tell the public about high inflation did not change; “record of increase in bean prices”.
Society could not see or understand the long-term damage caused by inflation.
We looked for the blame in politics and goverment, not in prices…
Let’s start by changing the name in Inflationary Period
The problem is “price instability” rather than high “inflation.” We have always been taught this as the prices of goods and products; but the employee’s wage is also a price. The subject of this article is the instability in this price.
The first place where high inflation hits a workplace is always increases in wages. You don’t know who to give what price hike. You don’t know how much other companies have done.
Isn’t that always a problem?
Sure, but the cost of a mistake you make (giving more or less a raise) when inflation is five percent is much less than in a period of high inflation. Are you going to raise 100 percent or 150 percent when there is 80 percent inflation?
The difference is min. 50 percent!
There is an important information asymmetry in between.
The employee knows the raises that his friends in other companies receive. He even knows the raises of other people in the same company. HRs often have to rely on surveys and gossip. The data set is much more limited than the employee.
A raise below the employee’s expectation instantly turns into dissatisfaction. Life outside is expensive, and an increase in salary is a pipe dream. This leads him to look for a new job. He blindly passes to the company that gives a little more. Increased circulation brings an additional cost to the company. Finding new employees, training, adaptation, orientation…
It goes away, but what remains can cause greater damage to the company. Their dissatisfaction permeates their co-workers. The company culture weakens…
In turn, companies become soulless towards their employees. A process of mutual devaluing begins.
At its most fundamental point is the difference between expectations and actuals. Price instability widens this gap.
Reconciliation instead of mutual distancing…
After a 20-year hiatus, price instability is back and won’t fall to single digits anytime soon. Most HR staff have not experienced such a period. Most of the survivors were at the very beginning of their careers when they lived. So let’s start by acknowledging that we’re unprepared.
We don’t have human resources strategies in a time of high inflation.
But it’s not too late to improve. As 24 Hour Business, the most important issue that we have successfully implemented within ourselves and that we recommend to our customers is to minimize internal uncertainty in the period when external uncertainty is high…
How To Survive in Inflationary Period
Identify your core team. Identify who you are if you don’t and push the boundaries to keep them happy. In return, try to get a promise from them to be permanent and to keep the team spirit alive.
Stay flexible. Design standard processes and raises for the rest of the team. Yes, you heard that right, do not index the hikes to performance. If you have team members whose performance you are not satisfied with, firing is a more accurate strategy for the team in general. Don’t expect to improve performance with money and wages. Be prepared for any surprises. Don’t try to keep the one who wants to go, but point out that increases in wages will be considered frequently.
Be sharing Inflationary Period
Be sharing not only in the material sense, but also in the spiritual sense. Sharing in the material sense is at the disposal of the companies themselves, but being a moral sharer and offering your own perspective to your team will reinforce their trust in you.
Whether you agree with these suggestions or disagree is a separate issue. However, it is an indisputable fact that the uncertainty in the coming period will permanently affect your human resources and, indirectly, your turnover. The right human resources strategy for this can be the difference between success and bankruptcy.