With additional economic insights and tips from Unum’s chief investment officer
Inflation rose to 9.1% in June 2022, the highest inflation rate in more than four decades, according to the U.S. Bureau of Labor Statistics.
“It’s been over 40 years since we’ve seen this type of economic environment,” said Martha Leiper, chief investment officer at Unum.
Leiper shared after The Great Recession (2007-2009), the economy recovered and grew at a slow rate. Most people were concerned with deflation, not inflation.
“The pandemic was a shock when many sectors of the economy shut down and unemployment soared. The Federal Reserve responded quickly to provide a significant amount of liquidity in the market, but the shutdown created disruptions in supply chains. This coupled with a tight labor market, has led to rising inflation on a global scale.”
Bottom line: Inflation is a huge stressor for employees. So, how can employers help?
Here are some strategies Unum has implemented for other HR and business leaders to consider:
Provide an emergency savings option
In early 2022, Unum rolled out a new benefit to help employees prepare for unexpected expenses – without needing to dip into their retirement or use credit cards. Employees can contribute a portion of their paycheck into an emergency savings fund. The balance in the emergency savings account is invested in the same funds available in the employee’s 401(k) account.
“If you’re a financial wellbeing person, you should work closely with your company’s 401(k) provider on available solutions to reduce financial stress and provide adequate resources for your employees,” shared Carl Gagnon, assistant vice president Global Financial Wellbeing at Unum.
Other financial resources Unum offers employees include access to dedicated financial assistants, regular financial wellbeing checkups, executive services, and backup emergency care for children, adults, and elders. As well as extensive leave and family support benefits.
Offer mental health resources
Financial stress is only one source of stress in 2022. Increasing price of goods and services, cost of housing, and the ongoing pandemic have further exacerbated the mental health crisis we were already in.
According to Kara Nassour, a licensed professional counselor with her own private practice, financial stress “can create chronic anxiety, exhaustion, strained relationships with partners, and prevent a person from getting housing, education, or healthcare.” She added that “these issues can be further exacerbated for single-parent families and others facing a significant drop in their standard of living.”
Unum Behavioral Health is one of the only mental health solutions on the market specifically built as a partner to employers. It goes beyond the typical Employee Assistance Program (EAP), with a proven approach to maximize employee participation and engagement. It delivers a personalized and private web portal to guide people to the support right for them, including clinical treatment options, along with a robust library of mental health resources.
Communicate benefits effectively and frequently
A significant number of employers already have financial wellness benefits in place for employees. If that’s the case, now’s the time to promote them.
“Employers have resources, but it’s common for employees to be unaware or find them inaccessible – employers need to communicate these benefits effectively and frequently,” said Laurie Mitchell, assistant vice president of Global Wellbeing and Health at Unum.
Mitchell also shared that it takes willingness from both parties – “the employer needs to provide resources, and it’s up to the employee to take advantage of them.”
Invest in other perks
Some companies are handing out gift cards for groceries and gas—sentiments that can go a long way in assuring workers they are cared for as inflation soars.
Beyond an employer perspective, Martha Leiper also has four additional pieces of advice for employees:
- Focus on what you can control. For someone who is closer to retirement, become more conservative. If you’re newer in your career, invest more in equities.
- Look for opportunities to invest. And invest for the long-term.
- Understand your risk tolerance and time horizon. If you can afford to take a risk, take it.
- Stay disciplined. It’s hard to see where you’re going when you’re in the middle of a crisis, but you’ve got to stick to your principles.
To learn more from Unum experts on all things inflation and how to offer resources to employees, listen to this episode of Unum’s HR Trends podcast: Inflation and employee wellbeing.