by admin | Aug 30, 2022 | Employee Benefits
Inflation is a silent budget killer- it causes everything to go up, from your groceries to your gas, as the purchasing power of money decreases. Americans are feeling the pinch as the U.S. experiences the highest inflation level in 40 years.
Inflation has been particularly frustrating for Americans who are struggling to pay for items such as housing, food, energy, and vehicles. However, consumer goods aren’t the only thing that have increased – employee benefit costs are also on the rise. With rising inflation rates, many employers are struggling with rising healthcare costs. A survey of large employers from the Kaiser Family Foundation found that 96% of respondents agree that the high costs of offering healthcare to their employees are excessive.
With inflation increasing, you may be tempted to cut benefits packages, but now more than ever, a generous benefits and perks package is crucial to retaining employees. In fact, 63% of companies say that retaining is harder than hiring them. Amidst the Great Resignation, HR is having to figure out how to alleviate the increasing benefit costs without passing those costs on to their employees and facing even greater turnover. Fortunately, there are some strategies that employers can use to remain competitive in today’s market while still providing quality benefits for their employees:
- Foster a Healthy Workforce – The healthier your employees are, the less likely they are to have extensive healthcare costs. Wellness programs are a great way to promote a healthy lifestyle. A cost-effective way to provide wellness benefits while helping employees through periods of high inflation is through a wellness stipend. With a wellness stipend, you reimburse your employees for their wellness costs such as gym memberships, home exercise equipment and wellness apps.
- Encourage the Use of Virtual Medical Services – With telemedicine, employees can schedule an appointment with your health care provider or specialist. They don’t have to drive to the doctor’s office, park or sit in a waiting room. They can see their doctor from the comfort of their bed or sofa which makes it easier to fit into a busy schedule. Telemedicine appointments are usually short visits, so employees can get back to work more quickly.
- Supplement Your Group Plan With a Group Coverage HRA – One strategy employers can implement to lower costs while extending coverage is to add a high deductible health plan(HDHP) to their group plan offerings and supplement it with a group coverage HRA (GCHRA), also known as an integrated HRA.
- Eliminate Benefits that Employees Don’t Use – Take a microscopic look at all the benefits you provide. Do you see any that aren’t being utilized enough to justify the cost of providing them? A great way to learn which of your benefits your employees are and aren’t using is by sending out an employee benefits survey. Your company can then invest the money from underused benefits to something that your employees value more.
While it may be tempting to simply reduce your benefits offerings during periods of inflation, it doesn’t have to be that way. Comprehensive benefits attract better employees and retain them for the long haul—meaning employers benefit from a more productive and satisfied workforce.
by admin | Jun 20, 2022 | Human Resources
U.S. President Joe Biden recently laid out his plans to combat inflation and the high cost of living. The average family is spending an additional $327 per month compared to pre-pandemic costs, according to a CNN broadcast May 10. At the time, the national average price of gas was $4.37. While the Federal Reserve can do more to influence inflation than the President, his announcement is welcome because people are suffering and some economists believe a recession is looming.
Under normal circumstances, the economy can cause burdens for HR leaders. In this case, businesses are still confronting uncertainty that comes from an ongoing pandemic, war in Europe, and a labor shortage. This is not to mention a mental health crisis and increased obligations for employers when it comes to employee engagement and experience.
The first step in addressing the negative impact of the economy is being realistic about the current situation and understanding how it impacts HR:
Some Can’t Afford RTO
Many companies are finally deploying their return to office (RTO) plans from 2020. Employees and leadership are at odds, in many cases, about whether to return or continue to work from home. One of the arguments workers have about WFH is that it is cheaper.
Some employees are quitting because they cannot afford the commute or lunch costs that come with returning to the office. Childcare, which has always been a problem for working parents, is another huge expense. In some cases, people end up paying to work, and it becomes more affordable to quit. HR must keep this in mind when considering wages and salaries.
Compensation and Benefits Packages
During this time of historic labor shortage, HR leaders are reassessing their compensation and benefits packages because they want to be competitive. Employees have leverage and higher wages has been one of the most requested benefits for obvious reasons.
“The talent shortage has boosted pay, but not enough to keep up with inflation,” according to The New York Times. “Wages grew 5.6% in the last year.”
Another obstacle for HR professionals is that increasing offers for new hires ended up creating an uneven divide between them and their veteran counterparts. Now, in some cases, loyal employees who stayed with their employers are earning less than new hires. With this kind of inflation, they may be lured by the prospect of higher pay elsewhere, which could continue the cycle of the Great Resignation.
Budget Concerns
Money is obviously not going as far as it used to go. Therefore, HR professionals should worry that this economic reality could cause budget cuts. For now, 79% of corporate finance executives say their budgets will be larger in 2022 than in 2021, according to Billing Platforms annual 2022 Trends in Finance Survey. With inflation as high as it is, they should prepare for cuts at some point. This could mean fewer resources for learning and development, employee engagement and experience initiatives, compensation and benefits packages, and more.
Travel Constraints
At the moment, most headlines point to Americans’ desire to get back on the road and see people face to face for personal and professional meetings. However, with gas prices and inflation this high, many budget conscious employers may pull back on travel budgets.
The United States is also preparing to confront another surge in COVID-19 cases. RTO poses risks, especially for vulnerable employees with comorbodities or those who live with at-risk people. In addition, parents of children under 5, who are not yet eligible for vaccination, have expressed concerns about both RTO and having to travel for work.
Solutions
Every department in every business must face the reality of inflation and higher costs. HR is no exception. In the case of HR leaders, rising costs is a people problem. Employees will need more money to support their families and to make work valuable to them. In addition, the business itself will have to constrain spending in areas like travel and perks. Maybe those free lunches will have to stop.
Still, there are some solutions available to HR. Promoting people from within the company as opposed to hiring new employees is a way to save money and improve retention. Being transparent about the limitations on wage increases and offering other less expensive benefits to compensate are other ways to address the problem.
Of course, travel can be replaced with videoconferencing and digital events that can be conducted from home. HR leaders have had to stretch resources before and will certainly have to do it again in the future.
By Francesca Di Meglio
Originally posted on HR Exchange Network
by admin | Feb 20, 2019 | Benefit Management, HSA/HRA
The Internal Revenue Service (IRS) released its inflation-adjusted limits for various benefits. For example, the maximum contribution limit to health flexible spending arrangements (FSAs) will be $2,700 in 2019. Also, the maximum reimbursement limit in 2019 for Qualified Small Employer Health Reimbursement Arrangements will be $5,150 for single coverage and $10,450 for family coverage.
Read more about the 2019 limits.
By Karen Hsu
Originally posted on UBABenefits.com
