The Bureau of Labor Statistics reports that the inflation rate has risen 9.1% annually. We haven’t seen inflation like this since 1981. As a result, the cost of several commonly used items has gone up dramatically. Employees are having a harder time making ends meet right now, and it’s critical that businesses do something to help. Despite the fact that businesses may adopt a variety of ways to handle inflation and its effects on their employees, a number of common strategies have evolved.
Why Should Employers Assist Employees in Dealing With Inflation?
- It’s no secret that dissatisfied employees who can’t stretch their pay to cover their basic needs are more likely to look elsewhere for employment. It’s important to remember that replacing those workers will necessitate spending money on finding and training a new worker, in addition to paying a higher salary.
- Nearly half of all workers say that worries about money make it difficult to focus on their jobs. The effects on their mental health and productivity can be significant. Providing financial stability for your staff can improve both productivity and morale.
Strategies To Assist Employees In Counteracting The Effects Of Inflation
Invest in People
Investing in employees’ education and development builds confidence, productivity, and output without cutting wages. Companies often provide their staff with access to counseling services. In the midst of the uncertainty brought on by inflation, organizations offer a variety of anonymous assistance to employees like mental health and financial planning programs.
Employers are aware that monetary compensation is not the only factor that motivates employees. Worker satisfaction is largely determined by their ability to advance in their careers. The best companies provide their employees with well-defined ways to advance in their careers as well as the resources they need to grow professionally.
Employee Benefits Assessment
Many companies are adjusting their benefits packages to assist workers to cope with the rising cost of living. When prices are high and consumers are seeking ways to cut costs, some businesses provide benefits like student loan repayment to assist their employees to pay their bills.
Health Care Cost Containment
Expenditures for medical care will rise alongside general price increases. It’s possible that companies that want to keep their employees would rather not increase their health insurance’s copayments, deductibles, and other expenses. To put it another way, this would provide employees a chance to put away some cash for emergencies or other uses.
Continuing Remote Work
It’s important to keep in mind that requiring workers to show up to the office incurs a monetary and time cost for them. Providing the option for employees to work from home is one approach to reducing labor costs without having to offer wage increases. By allowing employees to work from home, businesses can save money on transportation expenses, parking fees, vehicle repairs, and miscellaneous office supplies.
Improved productivity in exchange for a raise in wages would be a win-win situation for all parties involved. Therefore, implement a performance-based reward scheme if one has not already been in place. Give your workers the opportunity to improve their pay with improved performance. Pay special attention to the hourly workers who will feel the effects of inflation the most, and provide them with bonus opportunities that are within reach.
The last three years have been a complete nightmare for several employees, especially those who did not have the opportunity to work from home during the pandemic. You can gain a better idea of the ways in which your employees have been affected by inflation by conducting a brief survey with them. As a responsible employer, you must address their needs and respond to them by making necessary changes as per the strategies discussed above.