7 Ways Employers Can Help With Inflation – Without Giving Raises

Home7 Ways Employers Can Help With Inflation – Without Giving Raises

7 Ways Employers Can Help With Inflation – Without Giving Raises

7 Ways Employers Can Help With Inflation – Without Giving Raises

Easing the burden of inflation on employees

A newly released survey showed that the main reason U.S. workers left a job in 2021 was because of low pay. In addition, the February CPI report showed that inflation rose 7.9%. As the workforce development board serving Mecklenburg County, we know that retaining talent is crucial to business success. We thought it would be beneficial to explore these themes and continue our series with ways employers can ease the burden of inflation on their workers to keep their talent.

Feeling the effects

There is no doubt that the effects of inflation are felt by all workers, but some will feel them more than others. Employers must remember that inflation has a bigger impact on low to middle-wage earners than it does on high-wage earners. For a worker making $50,000 ($24.04/hr.), taking home roughly $43,000* after taxes, every $1,000 increase in expenses lowers their take-home income by around 2.3%. For a higher earning worker making $200,000, the same increase in expenses would only be around 0.6% of their take-home income.** Because of this, when we look at the average salary data from the U.S. Census Bureau it appears that some groups will likely feel the impact more than others. The table below shows the average annual salaries broken down by demographics in North Carolina.

Group Average Annual Salary in North Carolina***
Male $75,048
Female $48,096
White Alone $68,436
Black Alone $38,724
American Indian/Alaskan Native Alone $39,312
Asian Alone $88,404
Native Hawaiian/Pacific Islander Alone $42,564
Two or More Race Groups $46,680


Image 1.1

Impact on wages across industries

When we look at the average change in wages across various industries, it appears that most have seen a favorable increase. These gains are essentially wiped out after adjusting for inflation, with most industry’s salaries lowering. The following charts show a breakdown of wage growth throughout Mecklenburg County, North Carolina, and nationally before and after the effects of inflation.

Average Wage Growth by Industry

2020Q3 to 2021Q3

Image 1.2

Source: JobsEQ, 2021Q3.


Average Wage Growth by Industry

2020Q3 to 2021Q3 with 7.9% Inflation

Image 1.3

Source: JobsEQ, 2021Q3.


7 ways employers can help

Businesses should be proactive to show that they understand and value their workers. While most on the receiving end will likely say that salary increases are the best way to improve the situation, some companies are unable to do this. Salary raises also run the risk of pushing inflation even higher when they are paid for by increasing prices. We’ve put together a list of ways that employers can help employees with extra costs from inflation without giving higher than normal salary increases.

  1. One-time inflation bonus: A one-time bonus can help offset some of the additional costs that workers will likely accrue from the higher inflation rates without having to commit to raising salaries.
  2. Four-day workweek: Where acceptable, a shorter workweek can help cut down on costs from commuting and childcare. Since numerous studies have shown that shorter workweeks can also improve productivity, this may be an even greater benefit to the companies that choose to do it.
  3. Increase retirement contributions: Increasing the amount contributed to retirement accounts, without requiring a match, or starting a contribution could make a positive impact. An additional bonus to this option is that employer contributions to retirement accounts may come with tax benefits.
  4. Increase PTO: Increasing the amount of paid time off, or starting to give paid time off will not only help to retain talent but can also help improve the bottom line.
  5. Reduce costs of benefits: Employers can cover more of the costs of health benefits. This will allow employees to take more money home at their current pay and possibly offer tax benefits to employers.
  6. Student debt assistance: Employers can choose to offer some form of student debt relief. This is especially important as the pause on student loan payments may be coming to an end soon. Student loan assistance can potentially be given without increasing an employee’s taxable income.
  7. Remote work: Where possible, sticking with or switching to a fully remote workplace can help cut down on costs associated with commuting, childcare, and other work-related expenses. As many employers return to the office, it should be decided if it’s really worth it.

There will be additional costs to retain talent, but with the typical cost of turnover around 21% of the employee’s salary, the money spent to keep talent will be less than replacing it.

For more information on how Charlotte Works can help you retain your talent, head here!


By Ryan Nelson

Data Analyst

*Take home salary estimated using tax brackets found here.

**Estimated at $155,000

***Based on 2020 Q1 data, which was most recent at time of writing.

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