Inflation, Pay Rise, and Birmingham Accountant

COVID and Russia-Ukraine war has plummeted the economies all around the world. The continuous rise in inflation is affecting the lifestyle and basic needs of everyone. Given the situation, it comes as no surprise that your employees want to raise to sustain their lifestyle. And as bitter as it may be you will need to listen to your employees if you wish to keep your businesses going. And that’s why here are some of the tips straight from the Birmingham Accountant office that might help you.

Staff cost and total turnover:

A good strategy to determine whether a raise is needed or not is by looking at the staff cost and the total turnover of your business. The accounting rules say that your staff needs to be 45-55% of the turnover of your company. Based on this formula you can make easy decisions when it comes to giving raises.

If the staff cost is less than 45 you can think about giving a raise. And if the staff cost than 55% you might face it difficult to increase the wages.

Whom to give raise:

Although the system of giving a raise is pretty organized in multinational companies and corporates, it might be difficult in medium size companies. You will need to determine which department or occupation is the most important and brings in profits. This is because you will need to properly reward them.

It is beneficial to make rational pay raises as being biased might send a wrong impression to other employees and degrade their morale. Having a Birmingham Accountant by your side might give you a better picture of how this rule works.

How to decline:

Declining a pay raise is the most difficult and sensitive topic. It might cost you a good and hard-working employee and recruitment expenses. That's why you need to give an appropriate reason as to why they are not eligible for a pay raise yet.

You can come about this by telling them what they need to accomplish to get a raise. Or you can offer them some benefits from your side that might make the bitter taste of rejection digestible.

Are you in need of a professional Accountant in Birmingham?

If your answer is yes then Cheylesmore accountants are the one for you. Here you can find the most reliable and knowledgeable Accountants in Birmingham at affordable values. Contact us at 02476017778 to talk to our team and learn more about us.