20 Benefits and Strategies Employers Must Implement in Response to Inflation

Inflation is a stubborn and often devastating economic force that has far-reaching effects on employers and their employees. 

As the general price level of goods and services rises over time, it can impact everything from the cost of raw materials and labor to the salaries and benefits of employees. Because of this, employers must understand the challenges created by inflation and how to take care of their employees during these times.¹

In this article, we will examine the various benefits and strategies that employers should consider implementing in response to inflation. 

Whether you are looking to improve cost management, increase productivity, or maintain your competitiveness in the market, this article has all of the answers you need.

How Inflation Complicates Employee Pay

Inflation is complicated and hard to predict, and it has a significant impact on employee pay.¹

When the general price level of goods and services increases, it puts pressure on employers to raise the salaries of their employees to keep up with the cost of living. This can be incredibly challenging for employers operating in industries that are sensitive to inflation, such as retail and hospitality.²

Inflation can affect the purchasing power of employees, making it more difficult for them to afford basic necessities such as food, housing, and transportation.²

Unfortunately, inflation can also increase the cost of benefits and other forms of compensation, such as health insurance and retirement plans. This can put additional pressure on employers to find ways to manage these costs, which can be difficult in a climate of inflation.²

By understanding these effects from an employee's point of view, employers can better appreciate the importance of developing effective strategies for responding to inflation and can work to minimize the impact of it on their employees.

Benefits & Strategies

Responding to inflation and mitigating its impact requires a well-thought-out approach that considers the unique challenges and needs of both the employer and the employees. 

By casting a wide net and using a variety of benefits and strategies, employers can better manage the effects of inflation and create a more stable and secure environment for their workforce.

To make things easy, we’ve put together a list of the key benefits and strategies that employers should consider.

1. Allow for Remote Work

Allowing for remote work is a key strategy employers can implement in response to inflation. By offering remote work options, employers can help employees manage their cost of living and reduce the financial burden of commuting, parking, and other work-related expenses. 

Additionally, remote work can increase employee productivity, as employees can work from a more convenient location and where they are more comfortable.

2. Increase Cost-Sharing for Healthcare

As the cost of healthcare continues to rise, employers can help mitigate the impact of inflation by increasing their own contributions to employees' healthcare costs. 

This can include increasing the employer's portion of the premium, contributing to a health savings account, or offering a more comprehensive health insurance plan.

By increasing their own cost-sharing for healthcare, employers can demonstrate their commitment to their employees' well-being and financial stability.

3. Promote Benefits That Can Help

These benefits can include things like flexible spending accounts, financial planning resources, and employee assistance programs.

Flexible spending accounts allow employees to set aside pre-tax dollars for out-of-pocket healthcare expenses and other qualifying expenses. Financial planning resources can help employees better understand and manage their finances, including how to budget for rising costs.³

Employee assistance programs can provide support for employees who are facing financial stress or other personal challenges, which can help improve their overall well-being and job satisfaction.

4. Financial Wellness Programs

These programs can include financial education, budgeting tools, and resources to help employees better understand and manage their finances.

A holistic financial wellness program can help employees understand the impact of inflation and how to budget for rising costs.

Budgeting tools can help employees track their expenses and create a sustainable financial plan. Other resources, such as debt management services or financial counseling, can help employees who are facing financial stress.

Financial wellness programs can also employees become more financially literate, which can have a positive impact on their overall financial health.

5. Employee Discount Program

Another benefit that employers can offer in response to inflation is an employee discount program. This program provides employees with discounts on various products and services, such as retail items, travel, entertainment, and more.

Having access to these discounts can help employees offset the rising costs of living and reduce their financial stress. 

Employee discount programs can improve employee satisfaction and loyalty, as employees are more likely to feel valued and appreciated by their employers. This can help reduce turnover and improve employee morale, which can have a positive impact on the overall workplace culture and productivity.

6. Student-Loan Repayment Benefits or Tuition Reimbursement

With the rising cost of education and the increasing number of student loan borrowers, this benefit can provide much-needed financial relief for employees.

Student loan repayment benefits involve the employer contributing a portion of the employee's student loan payment each month, helping to reduce the employee's overall debt burden.

Tuition reimbursement involves the employer reimbursing employees for the cost of tuition or education-related expenses.

7. Bonus PTO

Paid time off (PTO) allows employees to take time off from work for personal reasons like vacations, family emergencies, or illness.

By offering bonus PTO, employers can provide their employees with additional financial support to help offset the impact of inflation. This can help employees manage their finances, reduce stress, and maintain a healthy work-life balance.

8. Corporate Cell Phone Plans

Providing employees with a corporate cell phone plan can also be an effective way for employers to respond to inflation.

With the increasing cost of living, many employees are struggling to keep up with their monthly expenses, including the cost of cell phone service.

By offering a corporate cell phone plan, employers can help their employees manage their finances and reduce their monthly expenses

9. Profit-Sharing Plans

Profit-sharing plans are a great way for employers to provide their employees with a direct financial benefit in response to inflation. These plans allocate a portion of the company's profits to its employees, giving them a direct stake in the company's financial success.

10. Listen, Understand, and Act on Employee Feedback

Employees can provide valuable insights into the challenges they are facing, as well as the benefits and strategies that would be most helpful in addressing those challenges.

Employers should regularly solicit feedback from employees and take steps to understand their needs and concerns. This can involve conducting employee surveys, hosting town hall meetings, or simply taking the time to talk one-on-one with employees.⁴

Once employers have a clear understanding of the challenges their employees are facing, they can use that information to design benefits and strategies that are tailored to meet those needs.

11. Paid Industry Certifications and Learning and Development Opportunities for Employees

Providing employees with paid industry certifications and learning and development opportunities can help them stay current with the latest trends and technologies in their field, and can increase their value to the company.

By offering to pay for certifications and training, employers can help their employees maintain their earning potential, even as inflation drives up the cost of living.

In addition to providing financial benefits, paid certifications and training opportunities can help employees feel more confident and competent in their jobs, which can improve their performance and job satisfaction.

12. Prioritize Well-Being Within Your Company Culture

Employers can support their employees’ well-being by offering access to resources such as health and wellness programs, flexible work arrangements, and opportunities for professional growth and development. 

By investing in their employees’ well-being, employers can create a positive work environment and foster a sense of belonging among their workforce.

In times of inflation, financial stress, and uncertainty can take a toll on employees’ well-being. Employers can help alleviate some of this stress by offering resources and support to help employees manage their finances, reduce debt, and make informed financial decisions.

13. Invest in Diversity, Equity, and Inclusion

Diversity, equity, and inclusion (DEI) initiatives are crucial in helping employees during inflation. A diverse and inclusive workplace can create a positive and supportive environment, which can help employees navigate the challenges posed by inflation. 

These initiatives can include employee resource groups, diversity training programs, and mentorship opportunities. This can lead to improved innovation, increased employee engagement, and improved customer satisfaction. 

Additionally, a diverse and inclusive workplace can help attract and retain top talent, which can be vital in a tight labor market where replacing employees can be difficult and expensive. 

14. Incorporate Salary Ranges

Salary ranges can provide a framework for fair and consistent pay within an organization, helping mitigate inflation's effects. 

By incorporating salary ranges, employers can ensure that their employees are paid based on their skills, experience, and performance, rather than just the rate of inflation. This can help attract and retain top talent, as employees are more likely to feel that they are being paid fairly and competitively.⁵

It also helps to promote transparency and accountability within the organization, as employees have a clear understanding of what they can expect in terms of pay and compensation. 

Employers can review and adjust salary ranges regularly to ensure that they remain competitive and fair in the face of inflation.

15. Charitable Contribution Bonus

A charitable contribution bonus is a financial incentive offered by a company to its employees for making charitable donations. 

The bonus may be in the form of a match, where the company matches the employee's donation or a flat amount for each donation made. This type of bonus is meant to encourage employees to give back to their community and support the causes they believe in. 

The charitable contribution bonus also helps companies to build a positive image and increase employee morale, as well as provide a tax-deductible opportunity for employees.

16. Benefits of Employee Retention and Low Turnover Rate

Employee retention is a critical factor for businesses, especially in times of economic uncertainty, such as high inflation. When employees feel secure in their jobs, they are less likely to look for new opportunities, which can result in lower turnover rates.

Employers can promote employee retention by implementing various benefits and strategies, such as offering competitive pay, flexible work arrangements, and opportunities for professional development.

By investing in their employees, employers can create a positive work environment that encourages employees to stay with the company for the long term.

In addition, a low turnover rate can save employers time and resources in recruitment and training expenses. It can also improve employee morale and foster a sense of stability within the company, which can have a positive impact on productivity and overall business success.⁶

17. Offer Flexible Work Arrangements

In addition to remote work, employers can offer flexible scheduling, part-time work, and job-sharing options to help employees better manage their work-life balance and expenses.

18. Encourage Health and Wellness Programs 

During inflation, the cost of health care and wellness programs can rise, but by encouraging healthy habits and providing resources for employees to be healthier, employers can help employees maintain their well-being while reducing their overall costs.

19. Provide Telemedicine Services 

Telemedicine services allow employees to receive medical consultations, diagnoses, and treatments over the phone or via video, potentially reducing their healthcare costs and time off work.

20. Train Managers to Communicate Effectively About Pay

Recent research indicates that approximately half of employees (47%) prefer to receive information about pay from their direct managers. However, many managers may feel uncertain about discussing pay, especially in the face of inflation.⁷

To prepare managers for these important conversations, three things should be done. 

First, employees who have concerns should be identified. Then managers should be trained on emphasizing empathy for employees. Lastly, clarifying managers' responsibilities and narrowing down what they need to know in these situations is also very important. 

Wrap-Up

As you can see, solving the problem of inflation isn’t as simple as it may seem. It takes a well-thought-out approach using many different strategies.

But with the right effort, employers can have a huge impact on their employees and help them to better navigate the effects of inflation, all while keeping them happier, healthier, and more productive. 

A well-designed financial wellness program can help employers to implement these strategies. 

Enrich is a fully comprehensive financial tool. It is best in class, fully customizable, and always evolving. There is even a ton of data backing it, showing how effective it is in helping workforces educate and improve their employee's financial wellness. 

Learn what it can do for you today.  

1 - https://www.investopedia.com/terms/i/inflation.asp 

2 - https://www.forbes.com/sites/forbesbusinesscouncil/2022/11/01/how-inflation-affects-the-labor-market/ 

3 - https://blog.ifebp.org/pros-and-cons-flexible-spending-accounts-fsas/ 

4 - https://www.forbes.com/sites/deniselyohn/2019/08/06/employee-feedback-is-good-for-employee-engagement-action-is-better/?sh=3e2cd0c374cc 

5 - https://www.shrm.org/resourcesandtools/tools-and-samples/how-to-guides/pages/howtoestablishsalaryranges.aspx 

6 - https://www.business.com/articles/employee-turnover-rate/ 

7 - https://www.gartner.com/en/newsroom/11-28-22-gartner-hr-research-finds-only-thirty-two-percent-of-employees-believe-their-pay-is-fair