Inflation is a thorn in everyone’s side right now, and it puts businesses in a tough position when trying to attract and retain top talent. Companies now need to be prepared to answer job seekers’ expectations, which can range from significant increases in salary to more robust benefit offerings.
Below we’ve outlined some ways your organization can get creative in helping employees combat the pain of inflation.
While it may seem as if the price of everything increased overnight, inflation tends to be the slow result of many factors. As our society has slowly reopened after the pandemic, supply chains have felt the effect of labor shortages mixed with high demand for goods, resulting in price increases. And many economists predict inflation may stick around longer than initially thought.
If you have been working to fill open positions over the last few months, you may have already experienced another side effect of rising inflation – a more demanding job market.
Experts anticipate the most extensive one-year projection hikes for base salaries since 2008. Organizations should expect average base pay rates—which do not include bonuses or one-time payouts— to go up 4%.
It’s wise for organizations to prepare for job seekers and current employees to ask for higher compensation packages to offset the higher living costs they are currently facing.
Using benefits to your advantage
Between the pandemic, the Great Resignation, and now inflation, it may feel impossible to respond to the demands of the job market. That’s why looking for creative solutions is more critical than ever.
Health insurance
If the budget allows an increase in the contribution portion to an employee’s healthcare premiums, it will help put money in your employees’ pockets. Contributing more towards employees’ premiums will likely be an added cost to your organization, but the payoff can positively impact recruitment and retention in the current job market.
Meal plans
Your employees are probably spending a good portion of their monthly budget on food. In fact, the average American spends $2,746 a year just on lunch. This presents an opportunity to provide some real relief in a tangible way that affects employees every day.
Edenred’s Ticket Restaurant is a meal benefits program that gives employees a monthly meal allowance via a prepaid card. Not only does this relieve the financial burden associated with lunch, but it also makes employees feel valued and appreciated, often leading to higher productivity rates.
Commuter benefits
Commuter benefits allow employees to use pre-tax dollars towards commuting costs like public transit, rideshares, and qualified parking expenses. These funds employees spend can help reduce their federal taxable income. Currently, the IRS allows employees to spend up to $280 per month on commuter benefits.
Utilizing a commuter benefits account can save employees a lot of money in the long run. For example, someone who earns $55,000 per year and uses the maximum amount of commuter benefits takes home approximately $1,500 more than someone with the same salary and commuting costs but doesn’t take advantage of a commuter benefits program.
On-demand pay
On-demand pay allows employees to access their wages immediately, rather than waiting for a traditional paycheck at the end of every two weeks.
On-demand pay directly impacts an employee’s ability to be in control of their financial well-being. According to the Federal Reserve, 40 percent of American workers would struggle financially to cover $400 or more of unexpected expenses.
In the past, people had few choices when dealing with unexpected expenses. Many were forced to use payday advance services with high fees or high-interest credit cards. On-demand pay offers a better solution for unforeseen costs by giving employees real-time access to their earned wages.
Lifestyle Spending Accounts
Lifestyle Spending Accounts are wellness plans with various offerings that can be tailored to your employees’ desires.
Employees can use Lifestyle Spending Accounts for health, general fitness, or well-being. Lifestyle Spending Accounts are very flexible and can be used for various goods and services, including athletic and camping equipment, entertainment, pet care, food and dining, continued education, and more.
Lifestyle Spending Accounts have a positive impact on both employees and employers. For employees, it is easy to participate in wellness programs and make more intelligent choices toward leading a healthier and happier lifestyle.
For employers, Lifestyle Spending Accounts help reduce healthcare costs and absenteeism while increasing employee productivity, morale, and loyalty.
Experts agree that there is a lot at stake this year and that talent retention is key to weathering this storm. In this competitive labor market, employee benefits are helping companies stand apart from the competition while simultaneously providing much-needed financial relief to employees.
Schedule a meeting today to ensure you’re offering the most competitive packages and that your employees take full advantage of them.
