How HR can help small businesses fight inflation

Executive overview

Inflation at a 40-year high is driving up operating costs, straining vendor budgets, and forcing small businesses to raise wages. HR is uniquely positioned to lead the response — touching both finance and people.

The path forward: open structured conversations with leadership, audit where money is going, and use low-cost retention tactics to avoid expensive rehiring.

HR's strategic edge is sitting at the intersection of finance and people data — use it.

Why HR must lead the inflation conversation

• 44% of small businesses cite inflation as their top challenge
• 80% of SMBs report financial health has suffered in the past six months
• 67% have raised wages to retain staff; 61% to attract new hires
• HR's dual visibility into costs and people makes it the natural owner of this issue

Starting the conversation with leadership

• Request an initial meeting with senior leadership to surface ideas and gather buy-in
• Identify specific areas for follow-up research: expense analysis, profit maximisation
• Ask: how are peers in your industry responding, and which solutions fit your culture?
• Schedule a follow-up meeting once research is done
• Support leaders with expense reports and invoice data they don't review regularly

Cutting organisational costs

• Audit office space — if remote workers are common, sublease unused areas to generate income
• Review all vendor contracts: remove goods or services no longer needed
• Expect vendor invoice spikes; negotiate or cut where possible

Reducing hiring spend

• Audit open roles — some responsibilities can be absorbed by existing team members
• Merging job responsibilities may eliminate the need for a full-time hire

Retaining talent without raising pay

• Focus retention energy on staff already in the building — recruiting is expensive
• Budget-friendly perks: casual dress, summer Fridays, flexible hours, unlimited PTO
• Generate options with leadership to ensure alignment with company culture