How to Combat Rising Wages Without Breaking the Bank

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For employers used to having the upper hand in the last 40 years, the Great Resignation is demanding a rethinking of employee relations. For the foreseeable future, power rests with workers, and wages are therefore starting to rise throughout the economy. To put it in perspective, Warehouse club Costco has boosted pay to a minimum $17 per hour, and Starbucks said it would raise minimum wages to $15 an hour next summer.
As the U.S. economy continues to roar back to life, new analysis suggests wages are likely to climb even higher thanks to mismatches between supply and demand for workers. It’s already clear some workers are holding out for higher pay before they reenter the workforce: the lowest wage a worker says they will accept to start a new job, on average, has grown 21% since the fall for people earning less than $60,000 per year, according to data from the New York Federal Reserve.
Nonprofits may feel like they can’t hire qualified professionals due to low budgets, but the pandemic has uncovered various intangible benefits employees are seeking. For one, flexibility is a primary concern for many workers, especially women and younger individuals, who have historically flocked to nonprofit work. During the pandemic, finding childcare has been an enormous problem because of school shutdowns and health concerns, which has played a big role in the female workforce participation dropping to the lowest level since 1988.

The solution to combating rising wages? Consider offering more flexible work hours, fostering a better work-life balance and creating a less stressful work environment.

Here are some cost-effective tactics your organization can apply:

  • Acknowledge faults within your organization and be open to change.
  • Take the time to listen to your employees, hear their opinions, and determine how they feel they could be better supported.
  • Emphasize employee retention, which means creating an environment where people want to be!
  • Prepare for a generational shift. As Baby Boomers exit the workforce, younger generations have a new perspective on life, the workplace, and how they would like to be managed.
  • Place trust in your employees to get their job done.
  • Look for ways to involve employees in your organization’s mission. Nonprofit professionals are drawn to the field because they want to serve. By continually reinforcing the connection between their job and the advancement of the mission, you will encourage them to see beyond just a paycheck.

Additionally, nonprofits can prepare and counteract this ongoing crisis by outsourcing. Doing so can help them optimize their financial processes so they can funnel much-needed funds back into their mission, as well as salaries and benefits for top talent. Access our white paper “How nonprofits can benefit from the Great Resignation of 2021” to learn more.