How to help employees navigate the impact of inflation during open enrollment

Innovative benefits can also help employers retain and attract the talent they need.

For the first time since the early 1980s, inflation is a sincere concern for U.S workers. As it drives up prices of daily necessities and diminishes the value of money already saved, “real” hourly earnings (wage growth minus inflation) have declined 3% since May 2021. That has the same impact as an across-the-board pay cut.

The impact of inflation can lead to increased financial stress for employees as they navigate economic uncertainty. How can employers help employees cope? By optimizing benefit offerings, employers can demonstrate they understand the financial pressures employees face – and provide solutions to help. This is especially critical ahead of open enrollment.

We work with hundreds of American companies to help their employees maximize the value of their benefits, and trends are emerging in the increased support employers are providing. Among our corporate partners, 72% offer a combination of traditional health and high deductible health plans, a 20% increase in two years. To help employees save for health care expenses, many companies are restructuring HSA plans from a fixed contribution to a company match. Some are also changing insurance carriers for more favorable pricing and adding medical plans.

Many companies are also expanding financial wellness benefits, going beyond standard 401(k) plans. This is a growing area, with 80% of employers already offering support, and 63% expecting to increase their budgets within two years. For these benefits to create a truly financially well workforce, they need to include comprehensive, ongoing, personalized planning and education across disciplines (taxes, investments, budgeting, etc.).  Best-in-class offerings comprehensive to employees’ full financial lives can differentiate inventive employers.

To attract and retain top talent, many employers are also offering:

Other innovative ideas leading companies are pursuing include:

Read more: Open enrollment season: A time to show your employees you care

These solutions can help companies of all sizes meet the needs of complex, diverse workforces. As they battle rising inflation, individuals will continue to demand more of their employers.

Comprehensive benefit packages help everyone prosper. Employees get support for critical needs, inside and outside of work. Alleviating employee financial stress can result in a more productive and engaged workforce, reduced use of sick time, decreased health insurance costs and a greater sense of loyalty. Innovative benefits can also help employers retain and attract the talent they need.

Greg Wilson is the head of workplace solutions at Goldman Sachs Ayco Personal Financial Management.