With the inflation rate constantly spiking around the world, doubling in 37 of 44 advanced economies over the past two years, it has no doubt put a strain on so many businesses.
Showing no signs of stalling, food commodities, and the price of diesel/ petrol continue to skyrocket which has affected the standard of living for people across the globe. The high-inflation rate has made low-income households turn to loans and credit cards to be able to cope during this period.
The workplace hasn’t been exempted from the hit, as Its impact has also been felt there, which has resulted in the mass layoff of employees across the globe, over the inability of employers to meet up with their salaries.
Some employees have had their salaries slashed from the usual amount that they were being paid, as employers are now devising various strategies on how to cut costs and maximize profit to prevent their already dwindling revenue and income from further falling.
The rising cost of living is impacting the entire workforce and there is a need for employers to address this, as most employees have had their disposable income negatively affected which is taking a toll on their workplace input.
Looking at the fact that bills are increasing, coupled with the fact that a large percentage of employees still earn the same amount is a cause for concern. Few experts have urged employers to look for how they can assist their employees either through an increase in salary, incentives, or compensation package, etc.
Studies reveal that money issues affect employees’ productivity in the workplace. With the current high inflation rate ravaging global economies, there is no disputing the fact that most employees’ productivity will be affected.
Asides from the fact that offering employees compensation packages, incentives, increase in salary and the likes, is a good idea to limit the strain caused by the inflation on employees. However, I posited that employers should enable employees to get flexible access to salaries, moving away from the conventional system of month-end payment.
Flexible payment system is a new concept whereby employees are paid with an on-demand option. This means if the employee requires their pay early, they can demand it from the management, in order to fulfill their financial needs removing pressures.
This system of payment provides an on-demand solution to overcome financial difficulties without the need to ask for an advance from the employer which, in itself, is a daunting task.
I realized that a flexible salary payment system is one of the major ways employers can use to cushion the effect of inflation on their employers to enable them to have access to their salaries whenever they need it. It can be either weekly or twice in a month, depending on whichever model the employee chooses.
Often, workers find it challenging to meet everyday expenses or worry about not being able to meet them. Additional pressure stemming from inflation which has led to financial difficulties can cause mental health issues if the long-term strain on the finances of employees is not addressed.
With a flexible payment system, it provides them with a solution that does not result in additional borrowing and interest associated with borrowing. Few analysts have attributed a flexible payment system as not just a way to make employees work harder, but it can also effectively bring about organizational changes as it materializes in labor productivity.
Asides from adopting a flexible payment system in the workplace due to inflation, I am of the opinion that it should be fully adopted in every organization across the globe even when inflation subsidizes. The system has been proven to attract talent, improve productivity and also leads to staff retention.