EXCLUSIVE: Why Companies Should Support Their Workforce amidst Inflation

September 29, 20224:48 pm2055 views
EXCLUSIVE: Why Companies Should Support Their Workforce amidst Inflation
image source: SME Horizon

EDITORIAL – Byline by Yoshihisa Aono, Chief Executive Officer of Cybozu Inc.

The workforce is feeling the brunt of a 5.2% inflation rate in Southeast Asia, which is unlikely to subside any time soon. Due to economic stress, political unrest and the rippling effects of COVID-19, most populations are experiencing an increase in many essential commodities like groceries, gas, and rent. This poses a threat to the psychological safety of employees, leading to low morale, quiet quitting, and eventually, an increase in turnover.

While some companies consider inflation to be out of their hands, the risks of inflation affect all income levels. Finding a solution is both a moral and an economic concern for businesses. The longer inflation stays undealt with, the more pressure there will be on business leaders to provide creative solutions for their teams.

Many businesses offer raises as a solution to deal with inflationary pressure, but with salary negotiations only occurring once or twice a year, the additional months of stagnant wages build up stress and force employees to seek greener pastures. To remain competitive, companies have an obligation to provide their talent with a supportive workplace, and this requires management to think beyond the confines of a rigid corporate compensation model.

For example, Cybozu, a Japanese software company, provided a one-time inflation relief allowance to offset global inflationary trends. The allowance has been dispensed to employees regardless of contract type, domestically and across its international locations, namely in Malaysia, Thailand, China, Australia, and the United States.

There are several potential answers to provide a safer and more productive environment for employees, but what they all have in common are fairness and flexibility. Companies must be fair and logical in considering geographical factors such as differences in taxation, cost of living, and transportation systems. While flexibility points to overcoming internal bureaucratic hurdles to roll the measure out as quickly as possible, which means providing immediate relief for talent to overcome the inflation ‘hump’.

This need for fairness and flexibility extends far beyond the inflation issue. In our increasingly complex and interconnected economy, human resource (HR) policies need a built-in mechanism to deal quickly with external shocks. Companies that embraced digitisation and remote-working policies during COVID-19 were rewarded with growth and continued productivity much faster than those that didn’t.

Dealing with inflation is one of many unpredictable factors companies will have to react to moving forward. Those that act fast will come out on top. Employees nowadays expect a high level of support and flexibility to be able to do their best work. Management has a choice: deliver sensible solutions or forfeit your most promising talent.

About Yoshihisa Aono, CEO of Cybozu

Yoshihisa Aono

Yoshihisa Aono co-founded the company in August 1997 after working for several years at Matsushita Denkou (currently Panasonic). In April 2005 he was appointed CEO and quickly began to spearhead the company’s workstyle reform. Then in 2011, he led Cybozu through its transition toward its flagship cloud-based product, Kintone. Aono is the author of several books on teamwork and happiness at work.

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