Inflation anxiety and stress are becoming debilitating issues haunting employees across businesses and industries. In this article, we are going to take a deep dive into the issue of inflation and how employers can help their workforces cope with the very real financial anxieties they’re facing.
The prevailing macro-economic factors across many industries have resulted in unprecedented inflation in many economies. Folks are finding it difficult to manage on salaries that are not keeping up with the rise in prices. Which has understandably led to a rise in stress and anxiety about inflation.
From Israel to Indonesia, inflation is showing harrowing effects everywhere. If we talk about the United States, the Consumer Price Index rose by nearly 8% in 2022. These numbers are the highest they have ever been in the past 40 years.
What Is Inflation Anxiety?
When you hear things like “inflation rates have doubled for advanced economies around the world” or that “the average inflation rates in the first quarter of this year alone were double what they were in 2020”, people are bound to think the worst.
Financial anxiety can be about but is not limited to the lack of money. It’s about being able to achieve goals, hopes, and dreams, basis how much they earn. When the buying power of their money shrinks, it becomes a struggle. For a significant section of workers, life is getting harder by the day.
Inflation Anxiety Can Be Combatted
Inflation anxiety is mainly a result of rising prices and stagnant wage growth. However, as we will see, there are a few companies that are doing everything they can to shield their employees from the effects of inflation and depression.
A Gartner survey conducted in January 2022 found that out of 71 companies, 38% were willing to increase their compensation budgets to help employees combat the serious effects of inflation. Microsoft Corp is planning to double its budget for employee salaries and boost stock compensation for its workforce by at least 25%. This action will especially help people who are in the early or mid-stages of their careers.
Amazon Inc. reportedly said that it would be doubling the base salary for its employees to help the workforce combat inflation and keep up with the competitive labor market in the process. These are the kinds of significant and game-changing moves that are great examples of how companies can help employees cope with financial anxiety.
Apart from all these efforts made by employers around the globe, governments are also coming to workers’ rescue. For instance, Austria, where the inflation rate is higher than 8%, has proposed cushioning its people from the impacts of inflation by providing everyone with a payment of 500 euros. Apart from that, there is an added payment of 300 euros for people who are unemployed or have small pensions.
7 Strategies To Help Your Workforce Combat Inflation Anxiety
To stand in the spirit of solidarity with the workforce is an important step to enhance employee experience. In the case of inflation, HR needs to lead the way to formulate agile and empathetic policies that will mitigate the overwhelming inflation stress and inflation anxiety that workers are undergoing.
Here are a few ways to do that well:
1. Provide financial coaching
Generally, anxiety is all about the fear of the unknown – people are calmer and more proactive about solving problems they know a bit about. Therefore, giving workers the access to financial information and better money management techniques can be a significant step toward helping them combat financial anxiety in this time of inflation.
2. Tweak pension schemes
These times of hardship make people worry not just about the present but also about the future. Companies can address this by tweaking retirement policies, expanding funds for their retirement contribution, and increasing the budget for pensions.
3. Facilitate employee discounts
Another way to compensate your employees while things are tight because of inflation is to provide exclusive, value-added discounts so it becomes a little easier for them to make it through this period. This “company response” to inflation will work wonders as this will aid employees both mentally and financially.
4. Implement special bonuses
As companies around the world continue to expand their salary budgets, there is also an added focus on improving appraisal programs. Apart from that, you could add the provision of additional bonuses to your compensation plan. This will help you keep your workforce afloat (economically speaking) and add to the morale of the workplace.
5. Provide access to comprehensive health benefits
Health benefits such as a dependable and comprehensive health insurance plan will take the financial stress of paying for medical treatments and shield not only the employee but their family from the financial anxiety of combating ailments. Health support and medical benefits, do not always cover mental health. Therefore, a crucial step to help employees cope with inflation stress and anxiety, would be to aid the workforce with pro bono mental health support outlets and platforms.
6. Offer student loan repayment
Employees from around the world are feeling the financial pressure of having to pay back their student loans. The student loan crisis, especially in the US, is crushing the economic aspirations of legions of young workers. In these financially trying times, companies that offer schemes to help with the student loans of their employees, will gain the trust and loyalty of their workforce.
7. Promote flexibility
A small but vital step to help your team combat the anxieties and financial burdens of inflation would be to simply facilitate more flexibility in working. Working from home helps many people save on the time and expense of commutes and also helps them lead healthier lifestyles. This will not only enable more productivity but also help employees tackle inflation anxiety.
The Way Forward
Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. – Sam Ewing
Inflation takes a toll on the mind as much as it does one’s finances. Employee inflation anxiety is lowering morale, which, in turn, will lower productivity. Companies are quickly realizing how this could negatively affect their businesses and taking steps to ease the burden on employees’ pockets and minds through these trying times.
Darwinbox helps you manage compensation and employee benefits seamlessly and flexibly. Learn how Darwinbox can help you help your employees, today!