By: Felecia Brasfield
Inflation has continually been rising throughout 2022, and this trend appears to be ongoing. There’s no doubt that the fallout of inflation is felt by businesses and workers alike. However, companies can help employees through inflation while focusing on retention measures.
Setting the Stage
According to the U.S. Bureau of Labor Statistics, the country has been experiencing the highest inflation rate since 1981. Unsurprisingly, employers are looking for ways to combat rising costs without losing talented workers. These staggering statistics are confirmed by the Consumer Price Index (CPI), denoting that the cost of living rose 7 percent during the 2021 calendar year. While this presents challenges, hiring managers and HR teams should be mindful that low to middle-wage earners feel the impact of inflation more than higher-wage earners.
“87% of Americans are stressed about higher prices for everyday goods, including fuel, food, and other essential items,” according to the American Psychological Association.
Workers and companies are concerned about the future, so it is crucial for employers to understand the hurdles inflation is causing and find ways to help employees through inflation.
In addition to worker retention, there could be drops in consumer demands, product shortages, increased supply costs, and financial anxiety felt across the board. The anxiety felt by businesses and employees during this trying time is significant.
What Is Inflation Anxiety?
Inflation anxiety is distress about rising costs alongside halted wage expansion. Even though unease is common, it adds another layer of difficulty to companies trying to carry out business as usual. Businesses spend extra time on a budget, payroll, and overhead expenditures. Employers are also saddled with having workers distracted, unproductive, or making an exit for higher wages elsewhere.
While pay increases aren’t the only metric used to measure job satisfaction. Robert Bird, Professor of Business Law at the University of Connecticut, shared with Lattice that “any non-monetary compensation can give employees value without being subject to inflation.” Employers need to help employees through inflation and show them they are valued, which can be done in many ways without salary increases.
How Are Companies Helping Employees With Inflation?
Even though inflation leaves the future a bit blurry, there are measures companies can take to show support and understanding for employees during tough times.
- Continued Learning & Development
Companies that invest in continuing education, training, and mentorship programs show value to employees. These can be meaningful and signal the company’s willingness to invest in its workers. In addition, offering industry-specific training that includes technology and education advancement grants workers valuable knowledge, skills, and experience.
Companies can benefit from focusing on training workers for new skills and technology stacks to help them perform current tasks better or prepare appropriately for a new role. These benefits extend to the employees as well, giving them access to priceless education resources without paying out of pocket and setting the stage for future dedication to the company.
Some items to consider:
- On-site Training
- Mentorship Programs
- Financial Planning Seminars
- Condensed Work Week
While it might take some strategic planning from a company perspective, a shorter work week benefits the employees. It doesn’t have to mean that the workers are clocking fewer hours. There could be ways to offer employees the ability to work four 10-hour shifts instead of coming on-site all five days. Having longer hours but fewer days allows the employee to spend less money on commuting costs or even childcare expenses.
- Retirement Contributions
Companies could consider increasing the amount contributing to the employee’s retirement fund. One financially beneficial approach is to make increased contributions without asking for an employee match. Some companies find this route enticing as tax benefits and tax breaks accompany some retirement contributions.
- Additional Paid Leave
Most employers offer some kind of paid time off. Companies who don’t offer this benefit could start, and companies who already do can offer additional paid time off. This gives an advantage to the worker while retaining talent without drastically affecting the bottom line.
- Offer Employee Perks
Businesses that provide perks, like gift cards, for their workers communicate to the employees they are cared for despite inflation. Focus on giving monetary gift cards for items individuals regularly need, such as groceries, fuel, and childcare resources.
- Technical School & Educational Reimbursement
Another way to help employees through inflation is by spending a portion of their wages to pay off previous debt. Recent data shows that over 43 million borrowers are trying to repay student loan debt. This significant number doesn’t even consider workers who gained expertise in technical and trade schools. Companies might consider paying off a portion of the debt to ease ongoing financial constraints. Depending on how it’s established, there might be an option to do so without increasing the worker’s taxable income.
Special, limited bonuses can provide compensation without agreeing to an hourly or salary increase. This offers immediate financial support to the employee without locking in increased payroll. Companies incur costs with employee bonuses; however, it might incentivize the employee to stay on board with the company longer, thus improving retention rates.
What About Healthcare?
Access to affordable healthcare is one of the top priorities for many employees, and healthcare costs are a substantial financial strain. From a company perspective, it’s important not to pass along increased costs to workers during such inflationary times. As a result, businesses are avidly looking for ways to cut down on rising insurance premiums.
“Reexamining employee healthcare costs and holding off on increasing employees’ share of their premiums is one way that employers often address rising inflation,” according to Julie Stich, VP of Content for the International Foundation of Employee Benefit Plans.
It might be advantageous to look for ways to provide mental health support, not just routine and emergency medical care. This could be accomplished through telehealth appointments, on-site mental health doctors, or decreasing the out-of-pocket copay for psychology and psychiatry appointments. Encouraging workers to manage stress and anxiety conveys the company cares about the employee’s well-being.
Employers need to ensure that they are discussing this message thoroughly if it’s being used to combat inflation. Workers need to know that the company is committed to affordable healthcare and that the business is taking on some of the increased costs to help staff. Appropriate dialogue increases the likelihood the entire workforce positively perceives the message.
Companies should evaluate all possible avenues to help employees through inflation without drastically altering the budget. While pay increases are wonderful for the workers, it isn’t always financially feasible for the company. With proper planning and creativity, companies can effectively communicate a commitment to employees and ease inflationary measures. Despite economic hurdles, employers can find ways to create satisfied and productive workers.