Benefits of Rewarding Employees As a Tool to Combat Effects of Inflation

Person balancing a stack of coins on a wooden balance structure

An insightful study conducted by Ento Canada revealed that 57% of Human Resource professionals and Canadian employers have contemplated altering employee benefits and rewards programs to combat the challenges posed by rising inflation and labor shortages. This strategic move aims to provide much-needed support to workers grappling with the soaring cost of living.
Across the nation, Canadians are firsthand witnessing the detrimental effects of escalating inflation. From fueling up vehicles at gas stations like Petro-Canada and Shell to paying utility bills with providers such as ATCO and settling grocery expenses at supermarket chains like Loblaws and Sobeys, households are feeling the financial strain. This increased economic burden has led employees to turn to their employers, seeking assistance in navigating these turbulent times.According to Statistics Canada’s Consumer Price Index data, the national inflation rate reached a staggering 8.1% in June 2022, the highest level since January 1983. Specific expenditures like gasoline prices surged by a remarkable 54.6% compared to the previous year, while food costs increased by 8.8%.

“Employers recognize the immense pressure their workforce is facing due to the escalating cost of living,” stated Dr. Steven Murphy, a renowned economist at the University of Toronto’s Rotman School of Management. “By enhancing employee benefits and rewards programs, companies can alleviate some of the financial burdens shouldered by their staff, fostering a more engaged and productive workforce.”

Experts like Dr. Murphy suggest that employers can explore various strategies to support their employees during this inflationary period. These may include:

  • Offering cost-of-living adjustments or salary increases to help offset rising expenses
  • Providing supplemental health and wellness benefits to address mental health concerns exacerbated by financial stress
  • Implementing flexible work arrangements to reduce commuting costs and improve work-life balance
  • Offering financial literacy programs and resources to assist employees in managing their personal finances effectively

Benefit Strategies Inc., a leading employee benefits brokerage firm based in Edmonton, Alberta, has witnessed a surge in inquiries from companies seeking to enhance their benefits offerings. “In these challenging times, our clients are actively exploring ways to support their valued employees,” stated Daryl Smith, the firm’s president and founder. “We work closely with them to craft tailored benefit solutions that address their specific needs and budgets.”

As the economic landscape continues to evolve, it is evident that employers who prioritize the well-being of their workforce through comprehensive benefits and support programs will not only retain top talent but also foster a more engaged and productive environment, positioning themselves for long-term success.

Bar graph showing Canadian Inflation Rate from 2012 to 2022

In the ever-evolving business landscape, savvy employers are recognizing the value of adjusting employee benefit packages as a means to boost total compensation and foster a satisfied workforce. This approach is proving to be a relatively straightforward and cost-effective solution compared to traditional wage increases.

For business owners seeking to reward and retain their invaluable employees, a myriad of options are available for consideration. One such avenue is increasing contributions to employees’ healthcare premiums with providers like Blue Cross, Sun Life, or Manulife. This simple act can alleviate financial burdens and demonstrate an organization’s commitment to employee well-being.

Another viable option is the introduction of wellness accounts or personal spending accounts. These innovative programs empower employees to allocate funds towards services or activities that promote their physical and mental health, such as gym memberships at facilities like GoodLife Fitness or Anytime Fitness, or wellness retreats at renowned destinations like Riva Ridge Resort in Kananaskis, Alberta.

Employers can also explore the implementation of flexible benefits, allowing employees to customize their coverage based on individual needs and preferences. This personalized approach ensures that each employee’s unique circumstances are addressed, fostering a sense of value and appreciation within the organization.

While these initiatives may incur incremental costs for employers, the long-term benefits are substantial. By alleviating financial pressures and promoting overall well-being, companies can expect to see a significant boost in employee morale and productivity, ultimately contributing to their bottom line.

Furthermore, investing in financial literacy and holistic health programs can yield remarkable dividends. Reputable institutions like the Canadian Centre for Financial Literacy and the Canadian Mental Health Association offer invaluable resources and educational opportunities to empower employees in managing their finances and personal well-being effectively.

Extensive research conducted by organizations such as the Conference Board of Canada has consistently demonstrated that workforces with lower stress levels exhibit heightened productivity and are less likely to seek employment elsewhere, underscoring the importance of prioritizing employee satisfaction.

Benefit Strategies Inc., a renowned employee benefits brokerage firm headquartered in Edmonton, Alberta, stands as a trusted partner for businesses seeking to navigate the complexities of employee rewards and retention.

Daryl Smith, the company’s esteemed president and founder, emphasizes the significance of enhancing employee benefit plans as an alternative to standard wage raises, stating, “By offering comprehensive and tailored benefit solutions, our clients can effectively combat the challenges posed by inflation, while simultaneously attracting and retaining top talent.”

As the business world continues to evolve, proactive employers are seizing the opportunity to leverage employee benefits as a strategic tool for fostering a motivated and loyal workforce, ultimately positioning themselves for long-term success in an increasingly competitive marketplace.