As inflation continues to strain household budgets and the unknown fallout from tariff announcements creates uncertainty, employees across all industries are facing mounting financial pressure. Prices are rising on everything from groceries to gas to rent, and while salary raises may seem like the most direct solution, they aren’t always practical or sustainable for employers. Fortunately, there are other impactful ways to support your team and help them combat the effects of inflation—without the need to increase payroll costs.
By implementing thoughtful, cost-effective strategies, companies can show employees they care while also boosting retention, morale, and productivity. Here are three smart—and cost effective— approaches employers can take today.
1. Make Open Enrollment a Tool for Financial Empowerment
Every year, companies go through open enrollment—but too often, it’s treated as a routine paperwork process rather than an opportunity to truly engage employees. In reality, open enrollment is a golden opportunity to help your team better understand and maximize the employee benefits already available to them.
As Thomas Murphy, Senior Vice President of Client Development at EBG, wisely notes, “By refining the open enrollment process in your business, you help employees make informed choices that benefit them and their families.”
Basically, if you overwhelm your employees with perks and benefits during open enrollment without education, they are less likely to take advantage of what you offer. And if they don’t use the benefits offered, then they certainly won’t appreciate them.
Too many workers default to last year’s choices or pick the most familiar plan because they don’t understand their options. Employers can change this by simplifying the language used to explain plans, offering educational content such as short videos and easy-to-read guides, and hosting Q&A sessions with HR or benefits specialists. Personalized tools like cost calculators and one-on-one consultations can help employees compare options based on their unique family and health circumstances. It’s more work from the administrative end, but it can help employees understand how the various employee benefits can provide real, tangible financial benefits for their specific situation.
When employees better understand their options, they’re more likely to choose plans that offer better value—whether that means lower premiums, better prescription coverage, or more appropriate deductibles. Ultimately, that puts more money back in their pockets and increases their appreciation for what the company provides.
2. Provide Flexible Work Arrangements That Reduce Daily Expenses
Remote and hybrid work models have gone from a temporary pandemic solution to a permanent fixture in many workplaces—and for good reason. Allowing employees to work from home, even just a few days a week, can offer meaningful financial relief. Commuting is expensive; eliminating the daily drive saves workers money on gas, car maintenance, parking, and public transportation. At the same time, being at home means fewer expenses on lunches, coffee, and even wardrobe upkeep.
Beyond these immediate savings, remote work can open up opportunities for employees to relocate to areas with a lower cost of living, giving them the ability to stretch their income further. It also enables better time management and can reduce the need for childcare or eldercare services if schedules are made more flexible.
To be fair, hybrid or remote work options need to come with certain expectations. Employees need to know that they need to hold up their end of the arrangement and keep on top of their workload. If you want to continue offering location flexibility and avoid being the next company that makes a sweeping return to in-person work only, get procedures in place that track employee productivity sufficiently.
3. Strengthen Pre-Tax Benefit Programs and Financial Wellness Support
Another powerful way to help employees protect their finances is by optimizing the employee benefits you already offer—especially those with tax advantages. Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and commuter benefit plans are often underutilized, yet they offer significant cost-saving potential. HSAs allow employees to contribute pre-tax income toward eligible medical expenses, and many accounts can be invested and rolled over year to year, making them a valuable long-term asset. FSAs function similarly, helping employees cover healthcare, dependent care, and even transportation expenses with pre-tax dollars—resulting in immediate tax savings and more take-home pay.
Employers can also ease the burden of inflation by offering commuter benefits, even for hybrid workers. Letting employees use pre-tax income to cover public transit or parking expenses is a relatively low-cost way to deliver real financial value. Similarly, maximizing retirement options like 401(k) matching or auto-enrollment into savings plans helps employees stay on track financially, even in uncertain economic times.
Equally important is providing access to financial education. Workshops, webinars, or even one-on-one sessions with certified financial planners can empower employees to take control of their financial futures. Whether it’s building a budget, managing debt, or learning to invest, financial literacy can be a game changer—especially when inflation makes everything feel less affordable. Employees who feel confident in their financial decisions are more focused, less stressed, and more engaged at work.
Looking Beyond Raises: The Bigger Impact
While direct pay increases are always appreciated, they aren’t the only way to show employees they’re valued. Offering flexibility, promoting smart use of employee benefits, and prioritizing financial wellness can have a deep, lasting impact on employee morale and financial stability—often with less cost to the employer.
After all, the costs of salary raises aren’t dollar for dollar. A $1,000 raise is going to likely yield only $700-800 in your employee’s pocket after taxes. Conversely, a $1,000 raise is going to cost you as an employer far more once you account for employer taxes and an increase in 401k matching if you offer that benefit.
Employers can create a more financially resilient and appreciative workforce by selecting benefits that empower employees. These efforts not only make good business sense—they also show your people that you’re invested in their success, both personally and professionally. That’s a powerful message at any time, but especially in a world where every dollar counts.
Photo by Brooke Cagle; Unsplash
