The inflation rate has been steadily rising since August of 2021, and we have now spent a full year with rates well outside the average. In addition to this sustained high inflation rate, many economists fear there could be a recession on the horizon.
To be prepared for this, companies need to be prepared to answer both their employees and potential job seekers’ expectations. These expectations range from significant increases in salary to more robust benefit offerings.
Here’s some ways your organization can get creative in helping employees combat the current inflation and be ready if a recession does hit.
Maximizing benefits
Standard benefits like health insurance policies are no longer enough to stand out in a competitive job market when hiring new employees. At the same time, retaining employees is also a challenge without a robust benefit offering.
How can you make sure your benefits are up to the challenge?
Health insurance
If your 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.
On-demand pay
On-demand pay lets employees have access to 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 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.
Meal plans
Eating is a part of everyday life, and during this time of both inflation and supply chain issues, even fast food is no longer a cheap option. 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.
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.
How Edenred can help
With high inflation rates upon us, and a possible recession looming – employment experts agree 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 so your employees take full advantage of them.
