Sinead Carville: Are cost-of-living payments more effective than pay rises?

At FinTru, we have always been tuned into factors internally and externally that impact our employees. We have several mechanisms to elicit feedback and conversation from employees to understand and get ahead of factors that may be having a negative impact on them. It has not been lost on anyone the cost-of-living crisis that has been evolving this year.

We knew this would be an issue that concerned our workforce, and that acting too late would create uncertainty. We made the decision to address this by providing an off-cycle salary increase for employees of an additional £2,000, or euros or dollars, depending on their assigned location, or an additional 5% increase to their base salary, whichever was the greater.

The increase applied to all FinTru employees, excluding FinTru principals: executive directors and managing directors, who already benefit from an enhanced executive benefits package, including the ability to purchase equity in FinTru. 

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We believe this provides more long-term security than a one-off bonus. By attributing the compensation to base salary, this enables employees to see an increase in their pay monthly.

Feedback from employees would consistently tell us that base pay is more important to them than performance-related bonuses. There is also a powerful message received by employees when decisions can be taken proactively. This tells them that their employer is assessing the landscape and making decisions that are future focused and in their best interest.

Consistently keeping pay ahead of inflation, rather than providing ad-hoc boosts, enables organisations to stem the level of uncertainty with regards to cost of living, which we believe will lead to greater satisfaction from employees.

Our cost-of-living increase is totally separate to our year-end compensation process, in which we review inflation as well as individual performance to attribute compensatory changes.

There is no one-size-fits all approach to this, rather organisations need to consider the best way forward for their employees and their business.

Sinead Carville is chief administrative officer at FinTru