The cost of living—from groceries to transportation to housing—remains a prominent concern across the U.S. as prices continue to soar. It’s no surprise that Americans rank inflation as one of the top problems facing the country.

In the current economic landscape, many workers are grappling with the cost of living crisis, and the consequences of these financial pressures aren’t limited to the home front. The unwelcome effects of financial stress are increasingly seeping into the workplace, posing a significant concern for employees and employers alike.

As an employer, how can you step up and provide practical assistance to your workers during these trying times? In this article, we’ll share some strategies for supporting your team’s financial well-being and creating a more resilient workforce.

Understanding Inflation and the Cost of Living

First, let’s clarify what we mean by “inflation” and “the cost of living.”

• Inflation is an increase in prices over a period of time and an associated decrease in consumers’ purchasing power.
• The cost of living refers to the average amount a person or family can expect to spend on basic expenses such as food, housing, and transportation while maintaining a reasonable lifestyle in a particular location over a specific period.

So, if the price of everything goes up (inflation), the cost of essential goods and services will also increase (the cost of living).

At least 60% of American workers say their paycheck isn’t keeping pace with rising household expenses, and that performance-based pay increases are more common than cost of living raises.

5 Ways to Help Financially Struggling Workers and Build Workplace Financial Wellness

1. Provide Emotional Well-Being Support

The interplay between money worries and emotional well-being is significant, and financial stress can cause a variety of mental health issues, such as anxiety and depression. To address this, employers need to offer greater emotional support for their workers.

Identifying signs of emotional distress is the first step. From there, employers can guide employees to the resources available to them. This could include employee assistance programs (EAPs) that offer people direct access to mental health specialists.

2. Normalize Money Conversations

An essential aspect of supporting employees experiencing financial difficulties is normalizing the practice of having honest and constructive conversations about money in the workplace. Be sure your managers and supervisors take the lead in this regard by showing empathy to their team members and adopting an approachable management style.

As a leader, you can encourage open discussions about money issues that either you or the business itself have faced. This will go a long way to create an atmosphere where employees feel comfortable discussing their own financial concerns.

3. Augment Your Employee Benefits

While raising your employees’ baseline salaries in line with inflation isn’t always feasible, you can explore alternative means to enhance their overall remuneration packages. This could include:

• Providing paid meals at work.
• Offering access to employee discount schemes.
• Assistance with lifestyle benefits like gym memberships.

Collectively, these benefits will help reduce employees’ expenses while supporting their physical and mental well-being.

4. Promote Financial Literacy

Building employees’ financial literacy is a great way to enhance their ability to manage their personal finances with confidence and responsibility. As an employer, you can provide resources like:

• Basic financial literacy education, including topics like credit scores, interest rates, APRs, and compound interest.
• Debt counseling and advice on debt consolidation.
• Workshops aimed at fostering better financial habits such as budgeting and saving.

It’s also a good idea to give employees the opportunity to participate in one-on-one counseling sessions to facilitate constructive financial discussions that lead to long-term behavioral changes.

Additionally, a plethora of online resources are available to workers seeking advice on managing their finances. Free budgeting apps can help employees keep tabs on their expenses, manage bills, and find the best deals. For example, Payactiv’s free financial wellness app¹ takes the mystery out of budgeting by providing smart saving and budgeting tools that give workers a complete picture of their total income, expenses, and savings. With these tools, we do all the number crunching, so your employees always know how much they can spend or set aside each month.

5. Embrace Flexible Working and Payroll Arrangements

To alleviate the financial pressure on your team, consider introducing flexible working arrangements, such as allowing employees to swap shifts or pick up extra ones to earn a little more cash. This provides them with the flexibility to manage their work-life balance more independently, which in turn alleviates their stress.

Pay flexibility is one of the most in-demand benefit programs on the market. Specifically, Earned Wage Access (EWA)² services are an increasingly common element of benefits packages. EWA allows workers to access pay they’ve accrued but not yet received. It helps your workers alleviate unexpected demands for cash and provides them with a dignified means to avoid unnecessary debt.

In Closing

In challenging economic times, companies play a crucial role in supporting their workers through the cost of living crisis by improving workplace financial wellness and fostering a caring, supportive work environment. By offering practical support, businesses can help their employees weather personal financial storms, which will improve their lives and overall workplace morale.

Payactiv is the leading provider of EWA services, which help employees manage day-to-day finances and bills without taking high-interest loans.

In addition to EWA, through our all-in-one Livelihood platform, Payactiv offers a suite of services aimed at helping your employees fully engage in both work and life. We take a multi-pronged approach to improving financial wellness and increasing employee satisfaction through complimentary savings and budgeting tools, bill payment, and financial health measurement.

Partnering with Payactiv is the sensible and responsible path to better workplace financial wellness, all at no cost to you.

Learn more about Payactiv, or get in touch to learn more about our services.

¹ Standard data rates from your wireless service provider may apply.

² Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.

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