Record gas prices have driven the annual inflation rate for the United States to 8.6% for the 12 months ended May 2022. This is the largest yearly increase since the early 1980s. The typical US household is spending about $460 more every month than they did last year to purchase the same basket of goods and services.
The results of inflation affect different groups with different levels of severity. Inflation has a larger impact on workers with lower wages, so employers must remember that rolling out solutions must be done in an equitable manner. Here are some ways employers can help employees deal with the frustration of inflation:
Let’s start with the most obvious solution. One of the most common reasons that employees are leaving their jobs is because somebody else will pay them more. Sometimes in order to keep great employees, you have to be willing to dish out a little more money.
When there's economic uncertainty that might be affecting your company's bottom line, it may be difficult to justify salary increases for your employees. However, if you don't proactively address inflationary pressures, you may end up having to play catch-up later.
A well-timed bonus can be a great way to show employees that they are valued. A nice chunk of cash out of the blue may be a morale boost for a happy employee, or a difference-maker for someone who is on-the-fence about their future at your organization. Sure, it’s not a salary increase, but it may be just what your employees need to help make ends meet.
If you're able to offer substantial bonuses it will improve your ability to not only retain top talent, but reel in workers that might be looking for a new opportunity at your company?
Normalize and encourage people taking more time off. When your employees take a vacation, there are serious health benefits: stress reduction, reduced depression, and even a decrease in heart disease.
Regular employee vacations typically increase productivity, so if salary increases and bonuses aren’t possible for the time being, consider increasing PTO and (this is key!) requiring people to use it.
Companies are now offering unlimited PTO to their employees as a way to reduce burnout and encourage workers to take the time they need to recharge. It might be worth instituting a similar policy and setting a minimum amount off, so employees know that rest and relaxation should be prioritized.
Employees spending more of their hard-earned money now on goods and services means less money saved for the future.
Employers can help by contributing to their employees' retirement funds. This will reduce the amount of money that employees have to set aside each month, and employer matching programs can provide a significant financial incentive for employees to stay with the company long-term.
A small increase to the amount of money contributed to an employee’s 401k can be a great benefit. Additionally, employer contributions to retirement accounts can often have tax deductions and credits. Win-win.
While most media attention is focused on gas and food prices, let’s not forget about the elephant in the room– healthcare costs.
If employers can find a way to pick up more of the tab with health benefits, workers will certainly notice on each paycheck. And, with the average health insurance premium for a family of four now over $28,000 per year, every little bit helps.
Also, consider including more benefits like fertility, adoption, and increasing time for parental leave. Finally, think about affordable access to therapy and mental health resources people may need to avoid burnout.
Obviously, this one isn’t possible for all jobs, but if doable, consider keeping or switching to a fully remote workspace. This will help workers cut costs associated with commuting, parking, meals, dry cleaning and other expenses. There are numerous reasons to go remote, including decreasing absenteeism and saving millions in overhead costs; like offices, furniture, and utilities.
Think of all the articles of clothing that have made their professional debuts in the last couple of years!
Create a safe channel for your employees to speak up. Does your company have systems in place for employees to report concerns, or discuss issues that may be difficult to bring directly to the People Team?
Find out from employees what can be done to assist them, rather than hearing about it too late, on Glassdoor or in an exit interview.
Employees are the lifeblood of any company, and their well-being should be a top priority for employers. When inflation is on the rise, it can put a strain on employees' finances and cause stress levels to increase.
Taking care of your employees will not only help them weather the storm of inflation, but it will also improve morale and keep your company running smoothly. Helping them under gloomy economic circumstances will help with engagement and overall productivity, so it's in everyone's best interest to do what you can to support your team.