How to Get Creative with Employee Benefits to Combat Inflation
With inflation on the rise, job seekers' expectations are simultaneously going up, and the job market is feeling the demand. Organizations need to be prepared to respond to job seekers’ increasing expectations, ranging from significant salary increases to more robust benefit offerings. We have some tips on how your organization can get creative with employee benefits to combat inflation.
What’s Causing Inflation?While it feels like gas prices increased overnight, inflation tends to be the slow result of many factors. As our society has slowly reopened after the pandemic, supply chains have felt the brunt of labor shortages mixed with high demand for goods, resulting in price increases. With inflation hitting a high of 6.8% in November 2021, many economists predict inflation may stick around longer than initially thought.
How Inflation is Putting Pressure on the Job Market
If your organization has been looking to fill open positions over the last few months, you may have already experienced another outcome of rising inflation - a more demanding job market.
According to the Conference Board, employers are anticipating the largest one-year projection hikes for base salaries since 2008. Organizations should expect to see average base pay rates—which do not include bonuses or one-time pay outs— go up 4%. In fact, this percentage prediction has grown over the course of 2021 from an original prediction of 3%.
It's wise for organizations to prepare for job seekers and current employees to ask for higher compensation packages to offset the higher living costs they are currently facing.
How Your Organization Can Respond
It may feel impossible to respond to the demands of the job market as a result of inflation and the Great Resignation. Still, organizations should feel encouraged to get creative with it. Here are a few benefit alternatives to consider outside of compensation increases:
- While inflation is on the rise it’s wise for your organization to look at your current employee healthcare plans. If your budget allows, your employer can increase their contribution portion to an employee’s healthcare premiums, putting more money in their pockets as a result. Contributing more towards employees’ premiums will likely be an added cost to your organization, but the payoff can have a positive impact on recruitment and retention in the current job market.
- Outside of healthcare, there are many benefit options that organizations may want to consider offering their employees. Among the more popular options are student loan assistance, daycare subsidies for employees with children, parking stipends, and pet insurance plans. These more "unique" benefit offerings tend to have a favorable response from employees and may even set you apart from your competitors in the job market.
- Many job seekers put a heavy emphasis on work-life balance and will note your PTO packages before they accept an offer. PTO packages tend to have more flexibility than healthcare benefits and may be worth revisiting to offset demands from inflation. One option to consider is an unlimited PTO model which can be attractive to prospective employees and help to boost retention.
There are many employee benefits for your organization to consider offering, and this list is just scratching the surface. Be aware that these benefits will come at a cost to your organization, and leadership teams may want you to provide research to back any decision made. Instead of guessing which benefits seem most compelling, you can go straight to the source, your employees, and ask for their input. Utilizing BerniePortal's survey tool is an efficient way to gather employee feedback and make informed benefit decisions.
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