Inflation: The Impact Inside and Out

Finances are a deeply personal topic.  While employees often are hesitant to talk about finances at work, the stress from financial pressures affects all aspects of their lives.

In June 2022, U.S. inflation hit a four-decade high at 9.1%. Increasing prices on everything from milk to rent affects your wallet and also contributes to anxiety and feelings of insecurity about being able to meet basic needs and plan for the future.

A survey by the American Psychological Association and The Harris Poll listed inflation as the number one stress contributor. Employers can, and should, play a proactive role in supporting employees facing financial burdens. Here are a few areas employers can offer or enhance:

1. Compensation

In addition to a cost-of-living adjustment, your organization may see this as an opportunity to conduct a market compensation analysis and make pay adjustments. Other creative ideas include a one-time inflation payment or a gas stipend for those traveling to the office.

2. Retirement Benefits

Hardship withdrawals allow employees to withdraw from their retirement savings for an immediate and heavy financial need, such as medical costs, funeral expenses, or tuition. Access to additional funds may relieve some of the financial stress associated with these major expenses.

3. Financial Wellness Education

Consider making financial education resources available to employees. Learning to budget and cut costs can clarify some of the financial unknowns. Employers can partner with their employee assistance program (EAP) or bring in independent financial advisors to highlight free planning techniques and tools.

4. Mental Health Resources

Lean in to remove obstacles from access to mental health support. About a third of people receiving therapy reported that they reduced the frequency of their visits due to cost. Can you reduce the employee contribution to counseling or offer access to an online provider to support access to resources?

It’s not possible to change inflation, but employers can offer benefits and education to alleviate some of the worries that come from financial insecurity.

_{SOURCE: United Benefit Advisors (UBA)}