After two and a half years of navigating disruptions to the economy following the onset of the COVID-19 pandemic, experiencing historic highs and lows in the labor market, and dealing with a global supply chain fiasco, it would be nice if we could enjoy a period of relative calm.
Unfortunately, economic headwinds keep mounting as fears of a looming recession grow stronger. The blockbuster June CPI report blew the doors off economists’ best estimates for inflation and sent shockwaves through financial markets earlier this month.
Here’s a snapshot of the U.S. economy going into Q3 2022:
- The annual inflation rate accelerated to 9.1% in June, the highest since November 1981
- Energy prices rose 41.6%, the steepest rise since April 1980, boosted by a 60% rise in gasoline prices and a 13.7% increase in prices for electricity
- Food costs rose by 10.4%, the highest hike in 41 years
- Prices also increased significantly for shelter (5.6%), household furnishings and operations (9.5%), new vehicles (11.4%), used cars and trucks (1.7%), and airline fares (34.1%)
Did you know that 22% of American workers surveyed experienced decreased productivity at work due to money worries, and 12% have missed work due to financial stress? A recent survey found almost 2/3 of employees said their financial stress negatively affects their work and personal lives. Furthermore, an overwhelming 82% of HR executives are worried employees’ financial troubles outside of the office could contribute to lost productivity.
Supporting employees through financial struggles imposed by harsh economic conditions and soaring inflation can help them manage stress, which in turn helps encourage worker productivity and drives better business outcomes for your organization.
Here are four tips for supporting your employees through high inflation:
1. Offer Financial Planning and Education
To help your employees reduce their financial stress and position themselves to start saving for their future retirement, consider adding a financial wellness program to your employee benefits package. Similar to other wellness programs, a financial wellness program aims to improve financial health, reduce stress, and improve employees’ overall well-being.
2. Provide Career and Professional Development Opportunities
Employees want the opportunity to develop their skill set, regardless of where they are in their careers. Consider implementing training or certification courses to allow professional growth. Some businesses even develop mentor programs where tenured employees assist in the personal development of the newly hired through coaching and advising.
3. Consider Non-Traditional Benefits Like ID Theft Protection
Did you know that 28% of employees see identity theft protection as a coveted perk? In today’s digital world, the need for identity theft protection is high, as it helps defend your employees against financial- and cyber-related crimes. Helping your employees avoid the huge financial mess that comes with identity theft is an excellent and innovative perk that companies are starting to offer. Extending identity theft protection to your employees demonstrates that you are interested in contributing to their peace of mind and financial wellness.
4. Support Employees’ Mental Health
An Employee Assistance Program (EAP) provides free and confidential assessments, counseling, referrals, and follow-up services to employees that experience personal and/or work-related problems. EAPs also help businesses address internal incidents or organizational structures that may be contributing to a negative work environment, enabling them to resolve and prevent such issues from occurring.
According to the Center for Prevention and Health Services, when EAP services were provided, work loss was avoided in 39% of cases and work productivity improved in 36% of cases. Essentially, with an EAP program in place, a company’s workers’ compensation, drug, medical, and disability costs can be reduced.
It’s not just employees who are feeling the strain of inflation, lately. Businesses of all sizes will likely be looking for ways to cut costs while remaining competitive in a labor market that still heavily favors job seekers.
One way to cut costs while streamlining operations is partnering with a Professional Employer Organization, or PEO. A PEO functions like an outsourced HR staff for your business and can help employers:
- Attract and retain top talent
- Ensure compliance with complex employment laws
- Free up resources to focus on core business priorities
- Realize cost savings from HR-related expenditures
When looking at cost savings alone, the National Association of Professional Employer Organization (NAPEO) found that the annual ROI from using a PEO was 27.2%! If saving thousands of dollars could help your organization weather inflation, partnering with SWBC PEO could be a smart move in the coming months.