{"id":3933,"date":"2022-05-23T10:44:27","date_gmt":"2022-05-23T15:44:27","guid":{"rendered":"https:\/\/www.employco.com\/blog\/?p=3933"},"modified":"2022-05-23T10:54:11","modified_gmt":"2022-05-23T15:54:11","slug":"inflations-effects-on-wages-and-benefits","status":"publish","type":"post","link":"https:\/\/www.employco.com\/blog\/2022\/05\/23\/inflations-effects-on-wages-and-benefits\/","title":{"rendered":"Inflation\u2019s Effects on Wages and Benefits"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" src=\"https:\/\/www.employco.com\/images\/blog\/Blog_Inflation-Rising.jpg\" alt=\"Rising Inflation\" width=\"1200\" height=\"545\" \/><\/p>\n<p><span style=\"font-weight: 400;\">With inflation at a 40-year high, businesses are seeing inflation erode their purchasing power, adding to the higher prices already created by supply shortages. Companies are also experiencing inflation\u2019s effects on wages and benefits, which affects their ability to compete and negotiate with existing and potential employees.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With the \u201cgreat resignation,\u201d businesses were already having difficulty attracting and retaining top talent. Many increased their wages to remain competitive. Still, even though wages are rising, inflation makes them worth less. And employees are starting to ask for more frequent adjustments to their wages. Evaluating your job market vulnerability is vital to determining how much your workforce is affected by inflation. <strong><span style=\"color: #046240;\">Employco<\/span><\/strong> can help you assess the effect of inflation on your business and your employees and make recommendations for how best to manage inflation\u2019s effects.<\/span><\/p>\n<p><!--more--><\/p>\n<p><b>Evaluate your wages<br \/>\n<\/b><span style=\"font-weight: 400;\">We\u2019re seeing many businesses starting to do more frequent pay reviews. In the past, they were doing pay reviews once a year. We\u2019re seeing companies doing pay reviews two or more times throughout the year to ensure that pay for the various positions stays competitive. In many cases, inflation is making those increases less competitive. An annual 3-4% cost of living raise was enough in the past. With prices up 7.9% to 8.4%, that annual raise is not enough to counteract the effect of inflation on prices and the overall cost of living.<\/span><\/p>\n<p><b>Strategies to cover increased costs<br \/>\n<\/b><span style=\"font-weight: 400;\">When faced with increased costs due to inflation and employees\u2019 desire for higher wages, businesses need to find a way to make up the difference to stay competitive. That can lead to hard choices about whether to pass the additional costs to their customers in the form of higher prices or to their employees in the form of diminished benefits and higher deductibles. For now, the trend appears to be that businesses are not making significant changes to their benefits packages.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other strategies that businesses can take to manage the effects of inflation on their costs include evaluating internal processes and identifying areas where they can cut costs internally. Streamlining processes and procedures can help an organization run more cost-effectively, freeing up revenue to cover wage increases. Another option is to investigate different compensation offerings, such as health and wellness or financial products, that help your compensation package remain competitive but with minimal cost increases.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing your HR or other activities to become part of a larger purchasing and negotiating group is another strategy to help a business remain competitive during periods of high inflation. <\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"mailto:hr@employco.com\">Contact us<\/a> to learn more about how <span style=\"color: #046240;\"><strong>Employco<\/strong><\/span> can help you achieve greater control over employee costs and streamline your internal operations.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With inflation at a 40-year high, businesses are seeing inflation erode their purchasing power, adding to the higher prices already created by supply shortages. Companies are also experiencing inflation\u2019s effects on wages and benefits, which affects their ability to compete&hellip;  <\/p>\n<p class=\"more-link\"><a href=\"https:\/\/www.employco.com\/blog\/2022\/05\/23\/inflations-effects-on-wages-and-benefits\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-3933","post","type-post","status-publish","format-standard","hentry","category-hr-solutions"],"featured_image_src":null,"author_info":{"display_name":"Employco USA","author_link":"https:\/\/www.employco.com\/blog\/author\/employcousa\/"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>Inflation\u2019s Effects on Wages and Benefits - Employco Blog<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.employco.com\/blog\/2022\/05\/23\/inflations-effects-on-wages-and-benefits\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Inflation\u2019s Effects on Wages and Benefits - Employco Blog\" \/>\r\n<meta property=\"og:description\" content=\"With inflation at a 40-year high, businesses are seeing inflation erode their purchasing power, adding to the higher prices already created by supply shortages. 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One of the critical effects of inflation that significantly impacts businesses is how it affects your employees\u2019 bottom line. Inflation has a direct effect on\u2026","rel":"","context":"In &quot;Employee Benefits&quot;","block_context":{"text":"Employee Benefits","link":"https:\/\/www.employco.com\/blog\/category\/employee-benefits\/"},"img":{"alt_text":"Inflation","src":"https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Inflation.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Inflation.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Inflation.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Inflation.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Inflation.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":3843,"url":"https:\/\/www.employco.com\/blog\/2022\/03\/23\/hr-chat-w-employco-usa-how-inflation-is-affecting-wages-and-benefits\/","url_meta":{"origin":3933,"position":1},"title":"HR Chat w\/Employco USA: How Inflation Is Affecting Wages and Benefits","author":"Employco USA","date":"March 23, 2022","format":false,"excerpt":"We receive a number of questions from our clients as we consult them on a variety of HR issues. https:\/\/www.youtube.com\/watch?v=lMG-v_raCT0 In this video, Rob and Jason discuss the effects of inflation at a forty-year high. They cover frequent salary reviews, job title evaluations, hiring and retaining employees, the gray area\u2026","rel":"","context":"In &quot;HR Chat&quot;","block_context":{"text":"HR Chat","link":"https:\/\/www.employco.com\/blog\/category\/human-resources\/hr-chat\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/lMG-v_raCT0\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4131,"url":"https:\/\/www.employco.com\/blog\/2022\/08\/08\/what-does-stagflation-mean-for-the-hr-side-of-your-business\/","url_meta":{"origin":3933,"position":2},"title":"What Does Stagflation Mean for the HR Side of Your Business?","author":"Employco USA","date":"August 8, 2022","format":false,"excerpt":"For workers in their 50s or younger, the term stagflation may be unfamiliar. But anyone who experienced the combination of high inflation and recession in the 1970s is well-acquainted with this unfortunate economic phenomenon. The factors that produced stagflation are back again today. Businesses will need to evaluate their operations\u2026","rel":"","context":"In &quot;HR Solutions&quot;","block_context":{"text":"HR Solutions","link":"https:\/\/www.employco.com\/blog\/category\/hr-solutions\/"},"img":{"alt_text":"Stagflation","src":"https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Stagflation.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Stagflation.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Stagflation.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Stagflation.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.employco.com\/images\/blog\/Blog_Stagflation.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":4370,"url":"https:\/\/www.employco.com\/blog\/2022\/12\/14\/hr-newsletter-3-hr-trends-to-monitor-in-2023\/","url_meta":{"origin":3933,"position":3},"title":"HR Newsletter: 3 HR Trends to Monitor in 2023","author":"Employco USA","date":"December 14, 2022","format":false,"excerpt":"Employment and labor responsibilities continue to be reimagined, and employers should expect changes to continue in the new year. 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