June 7, 2023 by Employers can still leverage benefits if raising salaries is not an option this year.
From the gas pump to the grocery store, Americans are feeling the hurt of inflation and looking for relief. With that said, employees may not have to look too far, since their employers may have the means to offset this financial burden.
Fully 55% of Americans are experiencing financial difficulties due to rising inflation.¹ Furthermore, 13% of these employees say the impact has been severe.¹ An earlier survey discovered that 24% of employees planned to reduce their spending and buy only essential items.²
The reality is that prices have increased 7.7% over the last year, yet employers plan on boosting salaries by just 4.6% in 2023.³ Thus, covering that gap will require new and creative efforts by employers.
Since employees are not only paying more for groceries and home maintenance, but also paying more for childcare, healthcare, and occupational/behavioral therapy, they are looking to their employers to cover or subsidize some of these higher expenses.
As such, employers should be reviewing the benefits they provide to their employees to explore if they can provide discounted telehealth and childcare, as well as offer simple financial planning tools which can help employees better manage their budgets. With that said, doing so may be difficult since employers themselves may find themselves in a financial pinch. In these cases, it is imperative that employers assist with education on existing benefits, as well as promote internal policies to reduce stress on their employees. For example, allowing employees to: work from home, conduct better financial/budget planning, and receive additional assistance with childcare needs that will require expenses.
Considering new work arrangements can have a big impact as well. For example, research has found that employees can save $12,000 annually by working remotely, largely by saving on commuting and other related costs.⁴ Furthermore, Global Workplace Analytics estimates that employers can save $11,000 annually per employee, primarily through reduced real estate costs, as well as lower absenteeism and turnover.
Finally, given the recent uncertain economics due to layoffs and hiring freezes, it is imperative that employers make a concerted effort to provide stability through new and better approaches to: career development, job skill nurturing, and occupational/mental health therapy, thereby supporting and fully engaging their team members.
Sources:
- Gallup, December 2022.
- Gallup, October 2022.
- Willis Towers Watson, January 2023.
- FlexJobs, January 2023.