Surviving inflation: 4 ways companies can support employees

It seems like we’re hearing more every day about inflation. We are all feeling the squeeze—and rising costs ripple to touch so many areas of our lives, including the workplace.

Workers are struggling to cover everyday expenses, handle debt, and save for the future, according to AARP’s Financial Security Trends Survey. And almost one quarter say their finances are in worse shape than a year ago because of rising prices, while 78% are worried about prices spiking faster than their income.

Financial stress can impair an employee’s ability to do their job. In fact, our recent State of the Workplace Financial Benefits survey found that almost two-thirds of employees said their financial stress negatively affects their work and personal life. Further, 82% of HR executives are worried that employees’ financial issues outside of the office affect their productivity. 

Supporting employees through financial challenges—like today’s soaring inflation—can help to not only reduce stress, but to also drive productivity and better business outcomes. So here are four things organizations can do today to help your employees manage the impact of inflation:

1. Help with student loan repayment

AARP’s data shows that as everyday expenses creep higher, it’s harder for workers to pay down their debts, with 42% saying they owe more than they can manage. For millions of workers, this could soon be compounded when federal student loan payments resume. 

Fortunately, companies can help: The CARES Act allows employers to pay up to $5,250 per employee, per year, tax-free, toward student loans—with the added benefit that employees receiving this workplace benefit would not owe US federal income taxes on the contributions. It’s a win-win for employers and employees alike.

2. Offer financial coaching and planning

In a recent survey, we found that only 35% of employers offer financial planning and 24% offer financial coaching for their employees. Yet 60% of employees want personalized financial planning and 54% want personalized financial coaching. 

There is a clear gap between what employees want in terms of financial wellness benefits and what employers are providing. Speaking with an experienced financial professional can help employees manage their finances amid higher costs and help chart a successful course for the future.  

3. Try auto-enrollment and employer matches in retirement plans

It’s hard to plan for tomorrow if you’re struggling to make ends meet today, and AARP found that inflation is affecting workers’ ability to save: 39% have nothing saved for emergencies, and 20% have zilch saved for retirement. The rising cost of everyday expenses is the top reason workers say they are not saving for retirement. 

Employers can help by not only offering a retirement plan but also making enrollment easily accessible and automatic. 

4. Return-to-the-office discounts

According to recent data from Square, workers returning to their offices after two years of working remotely may feel some sticker shock when they go to buy their lunches. That’s because prices have changed a lot since then. 

One way employers can help battle “lunch-flation” is by reaching out to popular dining spots near office locations and inquiring about any corporate discount programs to help employees save money on their meals. Also, if your company is able, you may consider treating your employees to an occasional group lunch to help employees reconnect and save a few extra dollars that can then be used to defray the costs of rising prices. 

As our employees across the globe face new headwinds in the form of pronounced inflation and geopolitical uncertainty, companies are well served to be on the lookout for ways to help them keep their financial houses in order. If we’ve learned anything in recent years, it’s that we are capable as a professional community of navigating tough times together. Make sure to let your employees know what resources are there for them to help weather the storm.

Krystal Barker Buissereth is Head of Financial Wellness, Morgan Stanley at Work.

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Wealth Management is a business of Morgan Stanley Smith Barney LLC. CRC 4671600   4/2022