ECONOMIC uncertainty, global political unrest and the ripple effects of Covid-19. These are just a few of the many factors in the 5.2 per cent inflation rate in Southeast Asia.
And it's unlikely to subside any time soon. With the globe experiencing increased prices of groceries, gas and utilities, it comes as no surprise that the workforce is feeling the squeeze of inflation.
Such economic stress poses a threat to the psychological safety of employees, leading to lower engagement, quiet quitting, and eventually, an increase in turnover.
Malaysian employees recognise how much their talent is worth, as 32 per cent are extremely likely to ask their employers for a raise, and 28 per cent will ask for a promotion. This pattern is ubiquitous worldwide, with 80 per cent of professionals declaring that inflation is impacting career decisions.
Finding a solution to the volatility of inflation is both a moral and an economic concern for businesses. What can organisations do to provide a safer and more productive environment for employees?
While there are several potential answers, what they all have in common is a need for fairness and flexibility.
Inflation is a danger to employers and employees alike. While most companies consider inflation to be out of their control, I believe there are many ways they can proactively support their teams. The longer inflation is with us, the more pressure there will be on managers and leaders to provide creative solutions for employees.
For example, Cybozu, a Japanese software company, has provided a one-time allowance to offset global inflationary trends. The allowance has been dispensed to employees regardless of contract type, domestically and across the company's global locations in Malaysia, Thailand, China, Australia and the United States.
Most companies deal with inflationary pressure by offering raises, but salary negotiations generally happen only once or twice a year. All those extra months of waiting and wondering are stressful for employees.
Companies that hope to be competitive on a global scale have an obligation to provide their talent with an optimal workplace, which requires management to think beyond the confines of a rigid corporate compensation model.
In terms of fairness, companies must be transparent and logical in considering geographical factors such as differences in taxation, cost of living, transportation systems, and in Malaysia's case, Employee Provident Fund contributions.
Flexibility means overcoming internal bureaucratic hurdles to roll the measures out as quickly as possible, providing immediate relief for talent to overcome the inflation 'hump'. Agility is crucial because traditional pay scales are too rigid and inflation isn't unique to certain income levels.
This need for fairness and flexibility extends far beyond the inflation issue. In our increasingly complex and interconnected economy, human resource policies need a built-in mechanism to deal quickly with external shocks.
Companies that embraced digitalisation 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 no different. Companies that act fast come out on top. Employees have come to expect a high level of support to be able to do their best work. In the digital age, companies hoping to thrive have to deliver.
The writer is chief executive officer of Kintone Corporation