There is some benefit to longevity. Specifically, I’ve been writing this column for nearly 20 years. More than 14 years ago, the January 2008 issue contained an article titled “It’s hard to compete with gas prices”. Thinking about how to tackle the inflation problem facing employers and employees this year, I dug up my copy of this article to see how the current situation compares.
The price of gas when the article was written in late 2007 was just over three dollars a gallon. Today the average price for a gallon is around $4.50 and the upward trend seems to be continuing. But that’s not all. Anyone who has shopped for groceries over the past few months knows that food prices have also risen significantly, while overall inflation in the economy is hovering around 8%.
Related: 10 States Hardest Hit by Inflation
The basic concept behind the original article applies today, even more so than 14 years ago: consumer demand for items like gasoline and food is inelastic; people are going to need these items no matter what price they have to pay.
The problem this creates is that inflated prices increase faster than employee earnings. If employees have a limited amount of money and need to spend a larger percentage of that money on gas and food, intangibles with more elastic demand, such as most employee benefits, can be leveraged. challenge of maintaining or increasing employee wallet share when it comes time to choose and sign up for benefits.
How can we respond? The answer hasn’t changed much:
“The challenge we face is communication with employees to raise their awareness and ensure that our products are perceived as necessities and not as superfluous items. We must constantly remind customers of the value of our products.
There is some good news. Today, we are better prepared to meet the communications challenge.
- Benefits administration systems have matured in their connectivity with employees. Employees are logging into these systems far more often, and not just during the open enrollment period. Uses include researching medical and dental service providers, filing claims, and portability services. It also makes it easy to list many products throughout the year.
- These systems allow communication with employees through several techniques: website, email, SMS, chat, videos, applications, etc. This means that employees can be trained throughout the year using the method they prefer.
- Employers are now embracing the concept that well-communicated benefits are much more appreciated by employees and their families. This allows benefits brokers and advisors to work with the employer’s benefits team to create communications campaigns throughout the year. The focus is on helping employees better understand their benefits and making benefits easier to use (especially when filing claims and receiving payments).
- Our audience is more receptive than ever. The pandemic has affected nearly every American, directly or indirectly. As a result, employees are much more open to considering products that protect them in times of health issues. The level of employee stress, resulting from both the pandemic and inflation, has caused employers to be much more aware of the value of offering products and services that help employees cope.
We have a tremendous opportunity to help employees in a difficult environment. We can provide them with training that will help them prioritize their needs, understand their ability to protect those needs through voluntary products, and make good decisions.