Inflation

What is Inflation?

Inflation measures the rate at which the general level of prices for goods and services increases over a given period, reducing the purchasing power of money. It is commonly tracked through indices such as the Consumer Price Index (CPI) and is expressed as an annual percentage.

Why Inflation Matters

For HR professionals, inflation directly influences compensation strategy. When inflation rises, employees expect salary adjustments to maintain their standard of living, and organisations must factor cost-of-living increases into their pay reviews and budgeting. Failing to account for inflation can lead to decreased employee satisfaction and higher turnover.