Benefits that help employees fight inflation

From groceries to gas prices, Americans are continuing to feel the pinch from inflation and are looking for ways to find some relief. But employees may not have to look too far — employers have the tools and benefits to help offset this financial strain. 

According to a December poll from Gallup, 55% of Americans are experiencing financial hardship due to rising costs. Thirteen percent say the impact on their finances has been severe. An earlier October survey by Gallup found that 24% planned to reduce their spending and buy only essential items, while 17% planned to cancel vacations and 10% said they would eat out less as a way to curb spending. 

Read more: Inflation forces over half of Americans to consider second jobs

Despite increased costs of living, expected salary increases are lagging behind: while there has been a 7.7% increase in prices over the last year, employers anticipate boosting salaries by just 4.6% in 2023, according to Willis Towers Watson. Bridging that gap will require more creative efforts on behalf of employers, says Kaleana Quibell, vice president of well-being and platform partners at Sequoia, an HR management platform. 

"While there is no debating that the cost of living and inflation have caused life expenses to go up, it is unfortunately not the case that salaries have gone up to accommodate," Quibell says. "Employees are paying more for groceries and homes, but also for important services like child care, medical procedures, and behavioral therapy. We are seeing more employees turn to their employers in hopes they may offer covered or subsidized services to help with such needs." 

Beyond salary boosts, employers should be reviewing their benefit offerings to see if they can provide discounted child care, virtual care and telehealth services and basic financial planning tools to help employees manage their budgets. However, employers themselves might be finding themselves in a pinch, Quibell cautions. But there are low-cost solutions and policies available. 

Read more: 5 must-have financial wellness benefits for 2023, according to Goldman Sachs 

"Benefits that help lessen the burden of costs on employees are the most well received by employees, but it's understandable in times like these not all companies may have a robust budget to accommodate this," she says. "In these cases, it's important that employers at least help with education and awareness of existing benefits, and encourage internal policies to help lessen the stress for employees, allowing them time away from work to sort out financial issues or help with caregiving needs that will otherwise entail expenses." 

While some employers have planned for a return to the office in 2023, sticking to a hybrid or remote-first arrangement can also be financially beneficial. Research from FlexJobs found that employees could save $12,000 annually while working remotely, due to savings on commuting and other lifestyle costs. Employers can benefit, too: data from Global Workplace Analytics estimated companies can save $11,000 per every remote employee, because of reduced rent and lower absenteeism and turnover rates. 

Sticking with remote work could stave off hiring freezes and layoffs, and foster an attitude of job security, which improves employee morale and mental well-being, Quibell says. When paying employees more isn't an option, employers should dig a little deeper to provide holistic support. 

"Staffing changes such as layoffs and hiring freezes have an impact on employee morale and retention in general," she says. "When job stability feels in question given economic times, benefits like career development, skills coaching, and therapy can be a great combination to make employees feel supported in their role. It's important in times like these for employers to focus on the well-being of their employees, particularly their mental health."