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According to the Bureau of Labor Statistics, the inflation rate has increased 9.1% year over year. This is also the highest inflation rate since 1981. It has led to significant price increases for many consumer goods.
Employees are facing increased financial difficulty during this time, and it’s become crucial for employers to respond. While employers may take various approaches to address inflation and its impact of their employees, the following are some common strategies that have emerged.
Many employers are making changes to their benefits to help employees mitigate the inflation effects they are facing. For example, employers are offering options like student loan repayment to help employees with budgeting and expenses during a time when prices are high, and they are looking to cut costs.
Many employers are considering pay increases to offset record inflation rates. According to data by Gartner, 63% of executives plan to make compensation adjustments in response to high inflation. Many employers may not be able to match salary increases to current inflation due to tighter budgets but may implement smaller increases.
Health care costs will also increase with inflation. Employers may choose to avoid raising copayments, deductibles, and other out-of-pocket costs to attract and retain employees. This would allow employees to save extra money and use it for other essential needs.
To cope with soaring inflation, many employers are offering remote and hybrid work schedules. This can help employees reduce gas and transportation costs as well as decrease day-to-day things like buying lunch or coffee at work.
Retirement plans are often quick to be cut during times of financial difficulty. For those employers with retirement plans, they should increase their education efforts around these plans. During times of financial uncertainly, employees value employers that make an effort to ensure stability. Heightening the conversation around retirement options is a good way to show employees that an employer cares.
Inflation is impacting employees and employers can make changes to benefits or salaries to help them during this difficult financial time. Download the bulletin for more details.