It’s no secret that inflation causes significant stress, making it more difficult to cover expenses and reach financial goals. The same paycheck that quickly met all of your employee’s needs a year ago may be falling short today, causing concerns and leading some employees to seek new jobs with higher pay.
You may wonder how you can care for your workforce and encourage them to stick with your organization. Explore the six options below to offer support during difficult times.
1. Assist with student loan repayment
Student loans are a considerable expense for many employees, especially younger team members. While student loan payments are currently paused, the reintroduction of monthly payments will become another expense that many employees need to consider.
Offering student debt relief would be a welcome reprieve, and the CARES Act allows employers to pay up to $5,250 per employee each year tax-free. The best part? Employees don’t have to pay federal income taxes on the funds, either.
2. Offer financial coaching and planning
For some employees, financial coaching may uncover areas for improvement that negate the need for additional funds. Providing guidance around budgeting and financial planning can help those employees better prepare and adjust for the current inflationary environment.
3. Provide auto-enrollment or employer matches in retirement plans
High inflation often hinders employees’ ability to invest, with extra funds covering the higher costs for everyday items instead. However, employees not currently taking advantage of retirement plans and employer match policies are leaving money on the table.
Employers can boost participation by encouraging employees to contribute or setting up auto-enrollment. With Merritt Business Solutions, you can apply these principles to a plan through Human Interest, our 401(k) provider of choice. Learn more about the benefits of 401(k) plans for business owners in our recent blog post here.
4. Consider a one-time inflation bonus
Company-wide raises may not be within your budget, which is the case for many small-medium-sized businesses. While many companies want to avoid raising payroll to cover inflation, offering a one-time inflation bonus is an alternative solution. Rather than committing to a permanent increase in your payroll costs, a one-time bonus offers direct monetary support without a long-term commitment.
5. Establish a wellness program with mental health support
Financial concerns can easily become a burden for employees, and it’s common for mental health to suffer as a result. In March of this year, The American Psychological Association ran a survey that found 72% of Americans report stressing about money at least some time in the prior month.
Now is the perfect time for employers to consider offering a wellness program in addition to their benefits package. Employers who provide mental health benefits are at a significant advantage over those who do not supply such benefits in that they are likely to have lower incidents of job burnout, onsite violence, and workplace injury. Find more tips on promoting mental health awareness in your workplace here.
6. Offer hybrid work options to reduce commuting costs
Finally, consider how your current work setup adds unnecessary costs for your employees. Gas prices tend to be particularly affected by inflation, and allowing employees to work from home can help them cut back on gas costs. As a bonus, many employees will appreciate the flexibility and autonomy, boosting morale even further.
Inflation is unavoidable for many consumers, but as an employer, you can lessen the impact of heightened prices. Consider implementing any or all of the options above to provide welcome support for your team during uncertain times. Looking for additional support in payroll, human resources, and benefits? Contact our team to learn how we can help!