Inspiring Business by Sharing Success

SME’s will see increased pressure from employees to increase salaries following tax changes says leading HR firm

SME’s will see increased pressure from employees to increase salaries following tax changes says leading HR firm

As the cost-of-living surges amid confirmation that tax rates will increase in 2022 – Midlands-based HR firm Breedon Consulting predicts employers will see a rise in requests for higher annual salaries and flexible working to mitigate these expenses.

2021 has presented a tough time for both employers and employees as they continue to negotiate living cost increases accelerated by the pandemic, including rising house prices, energy costs and transport expenses.

SMEs, especially those who have been badly affected, may not be in a position to compete with larger businesses who are able to increase salaries to help retain their employees amid a turbulent time.

Nicki Robson, managing director at Breedon Consulting, encourages employers to think carefully about how they can better support their employees during these challenging financial times to prevent staff leaving in search of a higher income.

“It’s a difficult situation for both parties at present, we are seeing a number of enquiries concerned about the possibility of losing staff due to competitors who are able to offer higher base salaries in the future, due to rising costs – whilst recruitment still remains challenging amid staff and skills shortages.

This presents a challenge for SMEs, but it’s important to remember that providing support to employees and looking at other ways to mitigate the changes and save staff expenses can go a long way. 

Whether that’s allowing more flexible working, considering bonus or commission-based schemes or providing employee discounts – there are options to consider. 

There is funding still available for businesses too – such as bursaries for equipment for those working from home.”

Nicki has outlined 5 key considerations for SME’s looking to better support their employees financially:

1. Consider bonus or commission-based schemes based upon KPIS

Commission based incentives can work well where relevant, as they not only motivate staff to achieve goals, they align directly to the business financial stability. Consider giving employees the opportunity to create leads and sales opportunities – even if it’s outside of their specific department.

2. Be as flexible as possible with hybrid working within the requirements of the business

With the majority of office-based staff becoming used to the financial benefits of working from home during lockdown, consider whether this is something you can commit to on a long-term basis whether full-time or based on a hybrid working model.

Where possible make this official by including within a contract – to ensure staff can trust that changes can be reversed.

3. Changes in contracts allowing employees to set up side businesses or take on another part-time position

If at present your contract doesn’t permit employees to have their own business – reconsider this to allow staff to generate further income outside of office hours, ensuring the business doesn’t pose a conflict of interest.

4. Encourage employees to look at government schemes which are available to them

During the pandemic, the government announced they would be introducing working from home tax credits to help contribute to the costs that are incurred whilst working from home. Ensure you staff are aware of government grants or schemes which are available to them.

Employee discounts

Consider signing up to a platform such as ‘Perkbox’ – giving employees access to discounts off a range of products and services to help them financially, from gym memberships to their Christmas shopping. Employee discounts are a meaningful way to support your employees and can boost staff morale.

Founded by managing director Nicki Robson in 1999, Breedon Consulting is a HR firm based in Ashby-de-la-Zouch in Leicestershire, that focuses on offering a personable, transparent service providing general HR management and learning and development services.  

If your business is concerned about the upcoming changes announced in the Autumn budget, Breedon Consulting are offering free 15 minute consultations.

< Back