Do you feel sticker shock every time you go to fill up your car? I’m with you. Gas prices are up a shocking 48% since last year, while the price of food is up an average 10%. Unfortunately, the Congressional Budget Office just announced that it expects inflation to persist through 2022, squeezing Americans’ pocketbooks even more.
While wages are up an average 4.5%, it’s just not enough to cover the cost of inflation. That’s a major concern for employers. We are depending on our team members for great performance in an especially tight labor market. Yet 61% of employees feel the extra stress from inflation is negatively impacting their work. (Source: Reward Gateway survey)
And you know it: the cost of running a business is up as well. It’s a real Catch 22. How can we help employees during this inflationary period and keep our bottom lines healthy too?
Here are five strategies to consider:
1. Hybrid or remote work schedule.
Commuting is getting more expensive by the day. As prices at the pump continue to soar, especially during the summer, consider implementing a summer work schedule with fewer days in the office. Even 1 day remote can make a difference.
2. Financial wellness benefits.
If you offer any of the benefits below, be sure to remind your team members of their availability, and their value. If these aren’t in your benefits package, now is a good time to investigate them. Here’s the important thing: 75% of workers say they are more likely to stay at their job if their employer offers financial wellbeing benefits (Source: Purchasing Power survey).
Employee discount programs
There’s pent up demand for travel now that the pandemic is largely behind us, but everything from the cost of a Jersey shore rental to Disneyworld tickets are sky high. Think: Cash-strapped families who haven’t had a vacation in more than a year can save 30 – 40% on theme park tickets, enjoy exclusive hotel rates, rental car deals, movie ticket discounts and more.
EAP (Employee Assistance Plans)
EAP plans offer access to qualified counselors to help employees cope with a variety of personal problems including financial ones. Access to a financial coach or planner could be a welcome solution right now for financially-stressed employees.
Continuing education support or tuition reimbursement
This employee benefit is especially popular for those looking to grow their career within your organization, young professionals or life-long learners. Can you afford it? Think about it as a strategy to reward loyalty. For example, support a certification or advanced skills class or after a year you could offer employees a certain amount each month towards their student debt.
HRAs, HSAs and FSAs
These tax advantaged accounts can help employees pay for certain healthcare expenses such as deductibles, co-pays and prescriptions.
1. Unexpected financial rewards.
Spot bonuses are an excellent way to reward employees without permanently increasing payroll. Maybe an employee has taken on a special project that has brought your business to the next level. Perhaps you have workers who have stepped in to fill the gap when others have left. Surprise cash rewards for those who go above and beyond show you care about their finances and can promote loyalty. Another idea: offer referral bonuses for bringing in new business or for recruiting people to fill open positions.
2. Workforce planning.
This may be a good time to realign work and reassess your team members. Say you’ve lost a long-tenured executive to the Great Resignation and you believe one of their direct reports has great potential. Can you promote this talented, less-experienced employee and reward them with a salary increase instead of replacing the higher-salaried executive? This could create a win/win.
3. Offer the right compensation.
When was the last time you did a salary audit? If you are experiencing a wave of team members leaving for better compensation despite a positive work culture, it could be time to look closely at your pay scales. If you can’t remember the last time you did a compensation review, I suggest that you seriously consider this. As far as salary increases, know that many U.S. employers are budgeting 3.4% for 2022.
Because current wages have less value than a year ago, workers are feeling the pinch and are looking to their companies for help. If you need assistance deciding how to structure compensation and benefits during an inflationary period, a trusted HR Advisor like NEMR Total HR can be your go to. Chat with us or contact us here.