Everyone notices inflation in some way or other. The grocery bill gets a little higher. Filling the gas tank costs more. Housing, utilities, and everyday expenses take a larger bite out of the monthly budget.
For employees, those increases do not stay separate from their work. When the cost-of-living changes, what workers need and value from a job can change too. For employers, understanding that connection is an important part of staying competitive for talent.
At Labor Solutions, we help employers navigate changing workforce conditions and find staffing strategies that make sense for both their operational needs and the labor market.
A Paycheck Doesn’t Stretch as Far
Inflation reduces purchasing power. Even when an employee’s paycheck stays the same, what that paycheck can buy may not. That can cause financial stress and put your employee’s paycheck under greater scrutiny.
Employees may begin comparing their wages with other available positions or looking for opportunities that offer greater financial stability. Research from the Federal Reserve has also examined the connection between inflation and increased job transitions as workers seek better wages.
For employers, this makes it important to understand what similar positions in your field are paying and whether your compensation is still competitive in the current market.
Employees May Look Beyond Salary
Higher wages are not the only way employees evaluate the financial value of a job. When household budgets are tight, benefits that reduce everyday expenses can become more meaningful. So, what does that look like? Perhaps it is a work from home day to cut down on gas, or an FSA account. This does not mean every employer needs to offer every perk possible, but you should look at your employment package to make sure it is competitive and offers some benefit for your employees.
When looking at your benefits package, ask yourself “What makes working here worthwhile for the people we are trying to attract and retain?” The answer may have changed since you last asked.
Employers Are Feeling the Pressure, Too
We know that businesses are dealing with many of the same rising costs their employees are facing. Increasing wages across the board may not be financially realistic, especially when materials, transportation and other operating expenses are also increasing. Employers must balance remaining competitive for talent with protecting the financial health of the business. This is where workforce planning becomes especially important.
Temporary staffing can provide additional flexibility as workloads increase or businesses need additional employees without immediately adding permanent positions. It can also help employers respond to staffing needs without relying exclusively on overtime or stretching existing teams too thin (and possibly have them look elsewhere for a new job).
Keep Your Workforce Strategy Moving
Inflation may be measured in percentages, but its impact on the workforce is personal. Employees feel it in their household budgets, and employers feel it in recruiting, retention and labor costs. Labor Solutions can help you evaluate your staffing needs and build greater flexibility into your workforce strategy. Connect with our team to get started.