HR professionals, the surest way to lose credibility with your management is by making uninformed decision at critical times. I remember goofing once in my career, when I told my CEO that ‘staff were not happy’ and he responded, ‘which staff?’ That was the last time I made a sweeping statement about employees.
I remember another time a CEO complained to me about his HR Director. She had fought desperately for a salary increase, stating it was a reason for the firm’s poor performance and here we were six months later, staff morale was still low and business performance had taken a further nose-dive; the firm was broke. He regretted throwing good money after a bad situation.
I have seen a lot of Cost of Living Ajustment (COLA) suggestions as a response to curb inflationary impact.
While I understand these are reactionary, a a practical approach to gain credibility, would be to get your numbers right before proposing COLA. You could:
1. Sit down with finance team or accountant to review the organisations performance over the last 3 years.
2.Review financial and non-financial metrics such as revenue, profitability, engagement, staff performance and turnover.
3. Examine the projected revenue and budget for the year and review how well the organisation has met its goals.
4.Taking into account projected cost increases, produce scenario plans and review the implications on the projected earnings of the business.
What story are the numbers telling?
Some organisations have deep pockets and a review will reveal that such organisations can accommodate inflationary pressures currently experienced by many economies. Money gives you options. In such instances, you can be creative with your initiatives and recommit to your employees.
However, many economies are driven by SMEs.The UK and US report 99% of businesses as SMEs accounting for 47% and 60% of the private workforce respectively. Nigeria reports 96% of businesses as SMEs accounting for 84% of employment.
Based on the statistics, majority of the world’s workforce work for SMEs.
These times are an opportunity for HR to be a credible activist and a business partner. Rather than join the bandwagon, make data-driven decisions. Allow data give you insights to make an informed decision.
Do your math, before any COLA propositions.
Your organisation may not be in a position to execute COLA. A performance review may reveal they are unable to sustain increased costs. A COLA request can turn into a downsizing exercise, instigating layoffs.
So, be data-driven, objective and creative about your recommendations.
Keep abreast with research and pay attention to what innovative organisations are doing. Consult with employees while at it. Make sense of your data and confidently present your findings to management.
All in all, remain credible.
All the best.