Strategies to minimize the impact of inflation on employees
No business is immune to inflation. Find out how employers can help employees minimize the impact of inflation with lifestyle spending accounts.
Recognizing the impact of inflation on employees and employers
People and businesses everywhere are feeling the effects of inflation and rising costs. The pressure. The stress. The uncertainty. As prices trend upwards, both employees and employers are bearing the burden. In fact, The Hartford's Future of Benefits Pulse Survey showed that 48 percent of U.S. workers report that inflation will make it difficult to pay for their benefits with 40 percent of employers citing scaling back on benefit choices in 2023.
Employees rely on benefits more than ever to provide additional financial security beyond their salaries. In times of such economic uncertainty, employers who do not offer attractive benefits programs that offset inflation impact risk losing top talent in need of support. Worse yet, doing nothing can result in further losses in productivity with employees quiet quitting or coasting due to insufficient support.
However, one of the best ways to mitigate these threats is to implement a program that is flexible and supports employees in times of need. Below is a strategy to help employers build programs that alleviate the pains of inflation.
How employers can help employees offset the pains of inflation
By being proactive, you can send a clear message that you support them, value their needs, and want to help in a tangible way with remedies for inflation. Follow these steps to devise a strategy that fits your company to relieve the stresses caused by inflation.
Understand the impacts of inflation on your workforce
As a first step, communicate openly and honestly. Keep a running dialogue with the impact of inflation on the business. Equal in importance, ask employees for input. How are they feeling the pains of inflation? What are their expectations of the company? Employee feedback will help determine how to best support their needs.
As a business, employers should continuously work with employees to gain insight. Not surprisingly, feedback is key here, and meeting people where they are when gathering input Have managers talk with direct reports in their one-on-one syncs, leadership can bring up the topic during team meetings, or for those not comfortable speaking in a public form, send out a company-wide survey to offer input. Use the collective insights to inform plans to support employees' needs and maximize productivity.
Evaluate programs that best support employees
As an employer facing the issues of inflation, it’s important to find programs that stretch the value of a dollar. Equal if not more important is that the programs are impactful and support employees. According to a conjoint analysis of the perceived value of benefits with flexibility and choice conducted by Forma, a lifestyle spending account (LSA) demonstrated 50% more value to employees over set options chosen by the employer. As such, $1 invested in an LSA is deemed to be valued at $1.50 in practice.
If unfamiliar, LSAs are essentially an allowance given by employers to employees who can use the funds. within certain constraints, to meet their individual needs. An LSA could cover the cost of gym memberships, fitness trackers, and wearable weights for employees who values activity and could use help paying for products or service to improve their physical health. Or it could help cover the cost of child, pet, or elder care expenses. For employees seeking advancement on their career paths, learning and development programs can be woven into the benefits structure to foster motivation and encourage skill growth. Additionally, as food prices skyrocket, reimbursement of groceries and meal kits reduces workers’ dependence on cheap, convenient meals with poor nutritional value and promotes a properly-fueled workforce. What’s great about LSAs is that the options are endless.
In the same study, when employees were given the flexibility to choose their benefits, it increased the overall value they assigned to their benefits programs. In actuality, a benefit set by the employer ranked poorly at 16 out of 17 options that offer flexibility to choose ranking higher. Given this research, a flexible benefits construct with lifestyle spending accounts proves valuable that accommodates choice and personalized needs - would be a worthwhile investment to alleviate the pains of inflation at scale.
Customize the program design
Knowing that a flexible benefits program with lifestyle spending accounts is the best path forward, how do you determine what categories to include? The answer is simple: look to employee feedback to inform, targeting areas they noted as meaningful and needing support. After all, the intent is to alleviate the pains of inflation on employees.
Flexible benefits programs allow employees to prioritize defraying costs that are relevant to their lifestyles. The account types and categories covered will vary based on what’s most meaningful to your workforce. As a starting point, consider LSAs that are anchored around wellbeing.
In addition to the program components, it’s important to utilize modern tooling that accommodates a flexible construct to accommodate personalized needs, maximize use, scale programs, and adapt to evolving needs. For HR leaders, dealing with several vendors and platforms, each with a unique interface and procedure, can lead to point solutions fatigue. For employees, struggling with outdated benefits platforms designed for the masses and complex claims processes can cause unnecessary stress - especially when trying to take advantage of a program that’s supposed to be a benefit.
The expectation is high for HR technology. Employers need modern solutions to implement benefits programs that deliver a high-quality experience, perform, and drive engagement. Employees need to be able to access and use their benefits aligned to their needs. As such, a modern platform with streamlined UX beneficial and personalization at scale like Forma is critical for utilization, engagement, and ultimately, ROI.
Build an omnichannel communication plan to offer support and drive engagement
Take advantage of a full range of communication methods and channels when launching the program to drive awareness, address any questions, and minimize confusion. The goal of the benefits program is to alleviate stress from inflation, making communication critical. Use clear language and direct messaging. Consider creating a dedicated landing page with resource links easily accessible at the time of launch and beyond to save employees time and hassle figuring things out.
Amplify the message through videos, webinars, or e-mails so that employees not only receive the message, they consume it in a way they like. Leverage the tactics used to get employee feedback to announce the new program in weekly syncs and team meetings. You can even post-launch messaging and reminders in slack or whichever direct message outlet your company provides.
Communication should be ongoing all year, not looked at as a one-and-done campaign launch. Craft plans that include reminders or promote how and why to take advantage of the program throughout the year. Then syndicate the message on the channels most used by your workforce. Continually promote benefits programs, so employees stay engaged before, during, and after the launch.
Set metrics and performance - iterate as needed
As an enterprise facing inflation, ROI is the name of the game. Setting and reviewing metrics is a necessary step to gauge utilization and performance when investing in new benefits programs. For example, set a metric to evaluate how much of the funds employees use vs. leave behind or monitor how/when employees are engaging with the platform. The advancement of modern HR technology solutions enables enterprises to set metrics and gather subsequent data. Recognizing dashboards and data only go so far, validate findings with employees. In response, if the program is not being used or performing to its full capacity, the business can refine with a data-informed approach that gets the program performance back on track.
Experience the benefits of a modern product to support your workforce
Using the strategies outlined will help mitigate the pains of rising prices. The tactics can be used broadly when designing or looking to build a benefits program meaningful to employees. The result gives way to a program beneficial to both the business and its workforce. Leveraging a strong modern product like Forma, you can implement the strategy with ease.
With Forma, you can select from a variety of benefits programs to meet the needs of your diverse workforce. In turn, your employees are free to build a plan that works for them, drawing on a curated marketplace of pre-vetted vendors. Rather than collecting and processing claims and loose receipts. Forma’s debit cards and online marketplace streamline the process, making it easy for employees to get the most out of their benefits from day one. As a result, HR leaders aren’t burdened with managing employee claim requests, and employees aren’t frustrated handling a cumbersome process. A key differentiator, new to market, is leveraging the power of performance metrics. Armed with usage data, HR leaders can refine and iterate the program as needed. The result ensures the benefits program is ultimately successful for the business and its employees.
Schedule a consultation with Forma today to find a solution that fits your company.