Economic inflation isn’t just an external news story – it’s a painful market condition that affects nearly everyone. It can have a wide-ranging negative impact on your workforce and, ultimately, your business.

How so? Inflation can:

• Diminish the reach of employees’ salaries, making them feel as though they don’t earn as much as they used to
• Affect aspects of their lives as consumers with the rising costs of everything from groceries to fuel to vacations
• Reduce the amount that employees are able to contribute to their 401(k)s, which can result in significant long-term impacts, including delays in plans to retire as expected
• Increase stress and anxiety levels in employees, which can:
  • Distract them from work
  • Cause productivity to plunge
  • Generate tension and conflict and, in worst cases, even violence in the workplace
• Force employees to take second jobs, which can cause burnout and exhaustion
• Lead employees to leave your company for higher pay elsewhere to counteract the effects of inflation

Communicate with employees about inflation: Yes or no?

Although no company is ever obligated to discuss topics that aren’t specific to the organization, be aware that your employees, especially younger workers (Millennials and Generation Z), may expect you to acknowledge issues that personally impact them both inside and outside the workplace.

In the post-COVID workplace, employees tend to have much higher expectations of their employers, including the frequency and breadth of communications. Therefore, understand the needs and expectations of your workforce.

To maintain strong employee relationships and avoid getting caught off guard, inflation is one of those current events for which you should consider preparing a communication plan. With your workforce, as a general rule it always pays to get ahead of certain issues and be:

• Connected
• Communicative
• Empathetic
• Transparent

Let employees know that you’re aware of their struggles during this challenging time, that you care and that you want to support them. As a result, they are more likely to feel heard and valued, and they are less likely to take any drastic, stress-induced actions.

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