How will work benefits help hard-hit employees during inflation?
Inflation will bite hard in 2022 according to predictions and therefore people will have to tighten the purse strings. However, help is at hand.
The Bank of England has forecast a gloomy outlook for 2022, with inflation set to hit a peak of 7% this spring, according to its predictions. Although it expects the level to start to come down after that, some experts don’t agree it will fall as low as 2%.
The global outlook is slightly different. According to Statista, the rate of global inflation will be 3.81%, with some countries experiencing higher rates than others. It also expects the level to start to come down slowly from 2023.
The rise in inflation is cause by slower supply and demand chains during the pandemic, the climate crisis that has caused flooding to some areas across the globe and the massive hike in energy prices.
What will this mean to employees across the UK and globally?
According to Employee Benefits, which cites research by Willis Towers Watson (WTW), more than a third (37%) of UK businesses were worried about inflation and rising cost of supplies, but also that the average employee pay rise would be a third higher than 2021. This worry is then passed on to employees, whose concerns are more about living costs than what their employers are paying for supplies.
According to a recent survey by Ipsos 76% of people asked said they thought their grocery shopping bill would go up within the next three months, with only 7% saying that it would decrease. This indicates that although a wage rise would address some of this issue, employers also need to look at other ways to support their employees.
The global picture, according to the IMF, is that inflation will be higher, especially in the USA, and global growth will be slower. The New York Times reported that experts have said that high inflation isn’t going to a long-term problem because people built up emergency savings, but others are more concerned. A fix for the situation seems to be employees asking for higher pay.
However, although the research points to a higher average pay rise, some employees may not receive the same rise compared to others. For some lower-paid jobs, it might mean skimping and saving, avoiding buying luxuries, or putting off house maintenance, for example. For others, it could mean unsubscribing from streaming services, not buying that gym membership, and finding cheaper travel into work. Forbes says although wages are going up across the board, the rise isn’t enough to keep up with prices overall.
The high rate of inflation has also forced some employees to find better paid jobs, and in some cases moving to a new areas altogether where costs such as mortgages are lower. Hybrid/remote work during the pandemic has made this possible for employees and this has increased the competition for talent among businesses.
How does a total rewards and benefits platform help employers and employees during high inflation?
Put simply, employers need to offer existing and prospective employees a comprehensive total rewards and benefits package that complements a decent wage. This will ensure businesses keep the talent they have and attract and retain more talent. A total reward and benefits platform helps employers create an exceptional benefits package while reducing benefits administration, automating processes, improving employee communication and ensuring better data governance and management of benefits and rewards costs.
With a platform in place, employees will find some employers will pay for their gym membership, offer health and wellbeing benefits, and be kept up to date through an app of the latest financial developments within the company. In times of financial instability, it could be said that every little helps, but in the case of offering your employees the right benefits and show them their total worth, you’ll be able to help them navigate through the tough times and create some stability.
In partnership with BENIFY
Benify offers the market's leading global benefits and total reward platform.