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Today’s economic challenges are hitting businesses and their workers hard. Rising inflation lowers buying power. Higher prices at the checkout and the gas station make staples more expensive and extras out of reach. Even those who are able to weather the financial storm have concerns about their investment and retirement plans. Some predict a recession is here or impending. Few are unaffected by difficult economic times – your employees are no exception.
Business leaders can help staff members in turbulent economic times in many ways. There are low- to no-cost initiatives that might be beneficial to employees, and by extension, to your business. As organizations and their workers adapt to current conditions, and brace for what may come, a concerted effort can weather the economic storm.
You may not be able to keep pace with inflation, but a small bump in salary might be enough to help employees stay on track without accumulating credit card debt just to exist. Look at the market around you — are other companies, struggling to maintain headcount — offering higher wages? If you want to retain good employees, you may need to adjust wages just to stay competitive.
If you don’t think you can afford a small increase today, consider losing top performers and having to replavIf you want to retain good employees, you may need to adjust wages just to stay competitive.ce them. It’s estimated the cost to hire a new staff member is 30 to 150% of their annual wage. In addition to the up-front costs of recruitment, you’re spending on lost productivity for the vacant position and reduced performance from those filling in. In today’s difficult market, time-to-hire is increased, adding more burden on existing staff. Indeed reports the average time-to-hire at 42 days, depending on industry it can be much higher.
Factor in low production during onboarding and job assimilation and the costs to replace a worker continues to rise. Then consider more than 30% of new hires leave their position within six months, starting the recruitment process over again. A small bump in salary is often the least expensive option for a business to retain talent.
If you offer commuter benefits, promote them widely. If there is a way for employees to access your facility with public transportation, encourage them to do so. You may have to be flexible, depending on the frequency and routes of trains and buses, but it’s a small price to pay against rising gas costs.
You may suggest car-pooling for staff members. They may be able to share the burden of rising prices with a colleague who lives either nearby or on their route. Create a centralized location for employees to volunteer to drive or be driven. You can coordinate who’s close enough or on the way and potentially slash commuting costs in half.
Some companies are offering temporary gasoline benefits for employees who can’t get to work any other way. These include weekly or monthly gas allowances in an attempt to offset the rising cost of fuel. Organizations are offering $25 or $50 extra per week to help with commuting costs in either gift cards or cash payments. If you’re offering this benefit, remember it is taxable income and must be reported with the employee’s wages.
If you offer financial wellness benefits, these can be invaluable. Financial wellness plans show workers how to maximize wages, avoid the credit card trap, and leverage earnings today and for the future.
Most organizations offer a 401(k) retirement plan and believe they’re doing all they can to help employees meet financial goals. Half of American businesses offer the benefit, but it’s rarely enough. While retirement plans are great ways to plan for the future, many employees can’t afford to invest in them today because of financial burdens.
Today’s workers may be financially illiterate: only one-third understand the basics of interest and mortgage rates and financial risk. Time reports that, according to the Financial Industry Regulatory Authority, financial literacy has fallen 19% over the past decade.
These workers may not know how to create (and stick to) a budget; don’t understand their credit score or what credit card interest is costing. Almost 6% of Americans don’t have a bank account – either savings or checking. They depend on costly check-cashing services. Even the most basic financial wellness counseling could put them on the path to economic security and wealth accumulation.
For those with a higher level of economic savvy, planning to purchase a home, send children to college, or retire comfortably are ways financial planning can be of assistance. They can help staffers plan for or mitigate the risk of unexpected expenses. Employees with student loan debt can find ways to pay down debt without sacrificing quality of life.
A growing tool to attract and retain talent is equity compensation. The Great Resignation is upon us. Estimates put up to 65% of American workers actively looking to job shift in 2022. When employees are invested in their company, they are not looking to make a change.
Stock options, profit sharing and other equity compensation tools boost engagement and productivity today and reduce turnover in the future. Business leaders want employees to take ownership in their work. They can achieve that by offering ownership in the company and its success. The impact of equity compensation is short- and long-term for business and workers. Staff members accumulate wealth as they contribute to the success of their company.
Financial uncertainty adds to employee stress, which diminishes productivity. Statistics show 58% of employees are stressed out by their personal finances. One study found 97% spend some portion of their workday worrying about finances. This costs businesses almost $300 billion annually in lost productivity. It also impacts employee wellness, bringing direct and indirect healthcare costs, absenteeism and more.
Reports show 87% of employees want assistance with finances. By expanding their wellness benefits to include financial security and independence tools, businesses can help employees manage today’s expenses and plan for their future. Too many workers live paycheck to paycheck; many may be struggling with credit card or student loan debt. Still others fear they will never meet long-term goals of home ownership, sending children to college or retiring comfortably. Providing the tools staff members need to manage their financial health today and tomorrow is good for workers and an invaluable tool to attract and retain talent.