According to Bloomberg, as of July 2022, the consumer price index rose 9.1% from a year earlier; this represents the largest gain since the end of 1981. Inflation impacts the entire workforce, their families, and individual budgets. As a result, this environment creates pressure for employers to evaluate making changes to try and support their employees in these financially challenging times.
Below are a few ways employers have taken action amid cost-of-living increases:
Salary increases and bonuses – employers are increasing salaries and providing employees with one-time bonuses.
Remote work – employers are offering more flexible remote work/hybrid work schedules to tackle the rise of inflation by reducing commuting and food costs.
Invest in perks – employers are providing employees with gift cards, gas cards, etc., to help offset the cost of living.
How are employers preparing for a possible recession?
When preparing for a recession, employers should start by asking some of these questions.
Do we have strong leaders who can make effective organizational decisions during an economic downturn?
Is our staff aligned to meet organizational goals?
What opportunities do we have to sustain or continue growing the business?
Asking these questions amid a possible recession would be ideal as you can focus on your organizational structure and preparedness.
Employers should also evaluate the following steps to prepare for economic change effectively:
Consider creative or alternative staffing options.
Employers can decide to hire temporary or part-time staff in lieu of full-time staff to offset the company budget.
Focus on current and future employees by building a more enticing hiring process to attract more candidates.
Consider options of last resort – some employers may need to take a more dramatic approach to address the period of economic uncertainty (i.e., slow down hiring or implement a hiring freeze).
Ways to provide employee assistance during this time:
In today’s record inflation, many employees want more assistance from their employers. Employers should be mindful of ways to help employees cope with this matter. Here are five methods employers can consider to face inflation:
Improve retirement benefits
Health care assistance
Student loan repayment assistance
Financial planning and coaching
Comprehensive financial benefit packages
The best way to prepare your workforce for a possible recession is to proactively plan while remaining flexible and adaptative. If you have a tight budget, think about finding creative ways to engage your staff (e.g. variable pay and spot recognition programs). Communicate your thought process and seek feedback from your team often.
Contact Kiwi Partners’ HR Services Team if you need help while evaluating your compensation or employee assistance programs.