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Inflation is driving up the price of daily necessities and data shows wage growth lags behind, which can have a serious impact on employee financial wellness. "Real" hourly earnings (which is wage growth minus inflation) have actually declined 3% since last May—meaning many employees have effectively gotten a pay cut this year.1 This may translate into mental health and employee self-worth issues, potentially leading to lower productivity and employee burnout.
It’s important to keep in mind that inflationary pressures—and their impact on employees—are likely to persist. Recent data from the Producer Price Index (PPI) indicates prices may continue to rise as underlying producer price increases are pushed through to consumers. Currently, the reported 10.8% increase since May 20212 means prices will likely remain high for a while.
Corporate partners of Goldman Sachs Ayco are beginning to implement benefit solutions to help employees gain increased clarity and confidence in their financial lives. Through these optimized benefits, employers can demonstrate they understand the pressure employees are facing in the current climate.
Over 600 HR managers said they’re considering additional benefits or salary increases this year as a response to inflation in a recent Mercer compensation survey.3 Some of these additional compensation measures include:
Many companies also are expanding benefit offerings to help employees stretch their dollars and better realize the value of their work, in recognition for all they do. Expanded offerings include:
Leading companies also are offering new financial assistance opportunities, aiming to meet the needs of all employees, at no cost to them. Here are just a few innovative ideas to attract and retain top talent:
These solutions may help meet the needs of your complex and diverse workforce as they face the impacts of inflation. As your employees navigate the current environment, Goldman Sachs Ayco can help them maximize the value of their benefits and compensation, save time, and increase confidence over their financial life—while helping your company increase retention. We can also support your HR team by becoming a pulse on your employee population and delivering insights to help guide benefit decisions moving forward.
Offering a comprehensive financial wellness benefit reflects your company’s culture and shows your employees you value them. Interested in empowering your employees to take control of their financial lives? Learn more about how Goldman Sachs Ayco can help.
1U.S. Bureau of Labor Statistics. (2022, June 10). Consumer Price Index Summary. https://www.bls.gov/news.release/cpi.nr0.htm
2 U.S. Bureau of Labor Statistics. (2022, June 14). Producer Price Index News Release Summary. https://www.bls.gov/news.release/ppi.nr0.htm
3 Mercer. (2021, August). US MBD: Corporate Services & Human Resources Survey. https://www.imercer.com/products/human-resources-survey
4Copeland, C. (2021, October 28). 2021 EBRI Financial Wellbeing Employer Survey: Focus on COVID-19 and Diversity Goals. EBRI. https://www.ebri.org/content/2021-ebri-financial-wellbeing-employer-survey-focus-on-covid-19-and-diversity-goals
Updated for tax year 2020