While inflation has slowed down in the last year, its record highs in 2022 — which peaked at 9.1% last summer — will have lasting effects on employers and employees alike.
According to global employment website Monster, 81% of workers report that their current wage has not kept up with the rising cost of living and inflation this year. And although the job market still favors workers, with U.S. employers adding 253,000 jobs and the unemployment rate decreasing by 0.1% to 3.4% in April, employees are not as optimistic about their raise prospects in the face of shrinking employer budgets.
In other words, it seems like employees are demanding more than many employers feel they can give. But in an economy where all food prices are predicted to increase 6.5 percent in 2023, according to the U.S. Department of Agriculture, stagnated wages is not an easy pill to swallow, says Vicki Salemi, a career expert at Monster.
“I hear through the grapevine how [workers] have not gotten a raise in a while, or their pay increase is not equivalent to how much their cost of living is increasing,” she says. “At the same time, as someone with a background in corporate recruiting, I know it’s really challenging to find top workers right now and get them assimilated into the culture and running.”
She sympathizes with both parties, noting that workers may need to keep their job options open in the face of non-competitive salaries, while employers may need to look for alternative ways to compensate employees for the sake of retention.
Monster surveyed nearly 2,000 workers across the country to get a clear picture of how workers are contending with an uncertain economic future. Here’s what employers should know.
According to Monster, 75% of workers are more mindful of their spending habits when it comes to basic needs like rent and groceries. This hints at how much has changed since the summer of 2021, when it was estimated Americans had collectively accumulated $2.3 trillion in savings, as noted by the Federal Reserve.
“Across the board, people are just being more mindful of spending, especially in the case when their actual take-home pay is not increasing,” says Salemi. “They have to stretch their wages further to eat, pay for their home, or gasoline.”
Despite a majority of workers feeling financially insecure, 55% reported that they didn’t receive a salary increase in more than a year and 62% did not receive a bonus. Salemi underlines that while employers may have good reasons for limiting their spending this year, it’s unwise not to reward employees for their hard work.
“It’s important for employers to be transparent about why no one is getting raises,” she says. “Then you can talk about what you can do for workers next year, or think about benefits you can offer that add value for employees — reward employees for a job well done.”
Salemi suggests offering benefits like free lunches, increased mental health support or even additional PTO. However, it seems a majority of employers haven’t gotten this message yet: 77% of employees report that their employers have not offered any additional benefits to keep up with inflation. Salemi advises employers to rethink this path if they want to retain their workforce.
Monster found that 67% of workers are looking for higher paying jobs, while 40% are looking to take on additional jobs to afford rising costs — and Salemi encourages employees to do just that, even if layoffs don’t seem to be on the way.
“Keep your resumes in motion, have job alerts active and see what’s out there,” she says. “Then you can interview from a stance of power and not desperation or anxiety. You should always think about what’s next, and be proactive rather than reactive.”
Nearly 40% of workers report that the rising cost of living is negatively affecting their productivity and leading to burnout. On top of that, around 40% of workers are worried about job security, causing 27% of workers to avoid taking sick days or PTO due to fears of job loss, according to Monster.
Salemi asks employers to take some of the pressure off employees by encouraging them to take PTO. And while workers may not be able to afford a summer vacation, they should still get some rest, or the burnout will only get worse, underlines Salemi.
“The number one tip I have for employers is to lead by example,” she says. “Leaders should block time on their calendar and expect other employees to do the same. As always, it’s important to have clear, honest and transparent communication.”
Article Published By: BenefitNews.com
Article Written By: Deanna Cuadra – Associate Editor, Employee Benefit News