The rising cost of living has been a recurring theme making headlines around the world. The annual inflation rate in the United States topped 7.1% for the 12 months ending November 2022 and reached 10.7% in the United Kingdom during the same time period. Although the most optimistic analysts suggest that inflation will subside in 2023, HR leaders have had to pivot from handling one crisis (COVID-19) to another in an incredibly short amount of time. What are the implications of the rising cost of living on employers’ reward and benefits programs, and what practical measures can be taken to address it?

While there is no debating that the cost of living and inflation have caused life expenses to go up, it is unfortunately not the case in most circumstances that salaries have gone up to accommodate. Employees are paying more for groceries and homes, but also for important services like childcare, medical procedures, and behavioral therapy. Because of this, more employees are turning to their employers in hopes they may offer covered or subsidized services to help with such needs.

Where possible, some employers are offering one-off cost of living bonuses or are providing more frequent pay reviews (biannually instead of annually) to offer support with the increase in cost of living. Sequoia has also observed companies offering support with caregiving, care navigation and virtual care, and packaged therapy visits. In addition, some organizations are rolling out financial planning tools to help employees understand how to better save, allocate, and budget their money during times like this.

 

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