By Anita Byer, Setnor Byer Insurance & Risk
Inflation. Inflation. Inflation. That seems to be what everyone is talking about these days, and with good reason. According to the Bureau of Labor Statistics, the year-over-year consumer price index jumped 9.1 percent in June 2022. This is the largest 12-month increase in over 40 years, which is particularly significant for employers. You see, a substantial portion of today’s U.S. workforce has never experienced anything like this before. Many are expecting their employers to respond.
While employers aren’t necessarily required to respond to or otherwise address inflation with their employees, it may be something worth considering The Great Resignation has left many employers struggling to maintain adequate staffing levels, and employees concerned about money are more likely to leave in search of higher pay. So, addressing concerns about inflation may prevent defections from an already depleted workforce. Here are a few things employers have been doing.
Employee Benefits. Some employers are altering their benefits offerings to help mitigate the effects of rising inflation. For example, employers are offering options like daycare subsidies and student loan repayment assistance to help employees with budgeting and expenses at a time when prices are high and employees are looking for ways to cut costs.
Remote Work. Continuing to offer remote and hybrid work schedules is another way employers are coping with soaring inflation. Employees can repurpose cash that would otherwise be spent on gas or other travel-related expenses. It can also help decrease the cost of day-to-day things, like buying lunch or coffee at work.
Reevaluating Compensation. Though not always feasible, many employers are considering pay increases to offset record inflation rates. Bonuses are another option. Some employers are providing gift cards for food, gas or groceries to help employees make ends meet. Make sure any compensation changes comply with applicable wage and hour laws.
Maintaining Benefit Costs. Health care costs are also rising with inflation, but now may not be the best time to increase the employees’ share for health benefits. Employers looking to attract and retain top talent are avoiding raising copayments, deductibles and other out-of-pocket costs for employees. This allows employees to save money and allocate it to other essential needs.
Offering Retirement Benefits. Some employers are increasing education efforts surrounding retirement options. Retirement plans are often quick to be cut during times of financial difficulty, so employers who are promoting those benefits are likely to be viewed more favorably by current and future employees. Heightening the conversation around retirement options is a great way prove to employees that an employer cares.
In times of financial uncertainty, employees value employers that make an effort to ensure their stability. Responding to employees’ concerns about inflation can help employers retain their existing employees and even make it easier to recruit new employees.