Assembling an Inflation-proof Benefits Package
Employers are becoming increasingly concerned about inflation's impact on their employees, especially as the U.S economy faces the very real prospect of an upcoming recession. Many employers are searching for creative solutions to better support employees while navigating a competitive labor market. Many employers are building inflation-proof benefits packages to help employees counter inflation's impact and address their attraction and retention struggles.
This article outlines employer strategies for assembling inflation-proof benefits packages.
Many employers' budgets are shrinking due to the current economic downturn. As a result, employers have fewer resources to allocate to employee compensation and benefits at a time when employee expectations remain high. With limited resources, employers can strategically invest in the benefits employees want and value most, such as cash incentives, flexible stipends, mental health support, enhanced leave options and financial wellness resources. Shifting to a holistic approach allows employers to provide employees with comprehensive benefits packages that can ease current inflationary pressures.
According to a recent Mercer survey, HR managers reported that they are considering expanding benefits offerings to maximize employee benefit spending in response to inflation. These benefits offerings include:
Employers have had to respond quickly to drastic shifts in social and economic conditions over the last few years. However, adjusting to frequent challenges can sometimes lead to organizational shortsightedness or overcorrecting. As most benefits-related decisions typically have lasting impacts, employers need to implement forward-looking strategies to ensure their employee benefits decisions align with their long-term goals. Establishing overarching benefits strategies, such as budgeting for mandatory and optional benefits forecasting benefits budgets into the future, providing employees access to high-quality providers, focusing on employee well-being and improving employee engagement, can provide organizations with multiple ways to effectively respond to a wide range of challenges and create inflation-proof benefits packages.
Employers are currently facing tough decisions related to benefits offerings due to inflation and the current state of the labor market. Some employers are introducing innovative benefits offerings to meet employee needs without increasing costs to employees. These offerings include the following:
Many organizations, especially smaller ones, may not have a formalized compensation process or full-time compensation manager. This can make adapting their benefit offerings for an economic downturn extremely difficult. These organizations can work with compensation consultants to conduct an objective analysis of their benefits programs, develop long-term strategies and make tailored adjustments. Skilled compensation consultants have the expertise to help organizations implement benefits changes and avoid costly pitfalls.
There's a lot at stake for an organization when attempting to alter its benefits offerings to ensure they're inflation-proof. The decisions employers make now will likely have long-term impacts on their organization's finances, employee expectations and ability to attract and retain employees. Inflationary pressures will likely continue to impact employees for the foreseeable future. By acting now to implement benefits solutions to address inflation's impact on employees, employers can address their attraction and retention challenges and help employees feel confident in their financial well-being.
For more employee benefits resources, contact ThinkTank Insurance Partners today.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.
Marty has spent most of the last 20 years developing software in the marketing space and creating pathways for software systems to talk to each other with high efficiency. He heads our digital marketing efforts as well as oversees any technology implementations for our clients. As a partner, Marty is also responsible for internal systems in which help our team communicates with each other and our clients.