Record High Rent + Mandatory Office Returns = Stressed Employees. Here’s How HR Can Simplify the Equation
by Nayya March 17, 2022
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As we approach the 2 year anniversary of the start of the pandemic, rent prices across major cities are skyrocketing. Monthly apartment costs are as high as they were pre-pandemic, and continue to rise, forcing many individuals and families out of their apartments and out of major cities. Simultaneously, after 2+ years of remote work, businesses are beginning to call their employees back to the office—meaning, employees can’t move too far away.
With landlords pushing them out of major cities, and employers pulling them right back in, employees across the country are feeling like they’re in the middle of the world’s least fun game of tug-of-war.
Record high rent increases
When the pandemic began, many fled the city in an effort to find an apartment or home with more space and open air. With remote work, those who once needed to be geographically close to the office could work productively from home, wherever that home may be.
As a result, city rent prices dropped drastically. In a classic case of supply-and-demand, there simply was too much supply, and not as much demand for those wanting to live in a city. However, these lower rent prices provided an opportunity for individuals who once couldn’t afford steep city rent to secure an apartment at a reasonable price.
Now, however, with the pandemic seemingly slowing down, landlords are taking the opportunity to drive rent prices right back up. Apartment List found that between January 2021 and January 2022, rents in NYC rose 33%—almost double the national rate. And tech hub San Francisco isn’t far behind, with rents up almost 16%, according to the San Francisco Chronicle.
Mandated office returns
Obviously for consumers, there is no “good” time to raise rents, but right now really isn’t a good time. Many Americans have no choice but to end their lease and begin a search for lower rent, which typically means moving farther away from the city. But for many of these same people, the requirement to go back into the office is right around the corner.
Many large city-based tech companies – think Google, Microsoft, and Meta (Facebook) – have announced a push to return to the office starting in late March and early April. This is driving a need to live close enough to the city so that a commute is manageable. Employees are stuck between deciding if they’d rather commit to an astronomical rent or a lengthy, expensive commute.
So what can HR do?
Of course, a mandatory return to the office isn’t one single person’s decision, and employees can’t look to HR to overturn these mandates. However, if you feel like many of your employees are caught in this rent vs commute tug-of-war, there are a few things you can consider as an HR team.
Advocate for a hybrid work environment
One thing that the pandemic taught us is that everyone lives and works differently. Some coworkers thrived in remote work, feeling more focused and less stressed—while others despised remote work, feeling distracted and disconnected. We’ve learned that when it comes to working style, each employee is unique. Why not instill a flexible back-to-work policy that meets employees’ unique needs?
Consider a hybrid environment, where employees can choose if they want to go into the office 1, 2, 3, 4, or even all 5 days of the week. Not only will this show employees that you care about their mental health and creating the best workplace for them, but it also helps alleviate the aforementioned rent crisis. If an employee is feeling like they can no longer afford to live in a major city area, moving out of the city will feel a lot more manageable if they know they only need to commute into the office 1 or 2 times per week.
Organizations leaning into this hybrid model understand that there may be some challenges as they learn to manage partially remote, partially in-office employees, but for a population that once transitioned to remote work overnight, many are going into it with the mindset that it’s nothing we can’t handle.
Take Twitter for example, CEO Parag Agrawal announced last week that their business will once again reopen office doors on March 15th— but only for employees who feel comfortable returning to work. He addressed that yes, there may be some struggles adjusting to a more distributed workforce, but he is confident that the team will learn and adapt.
Giving employees the chance to be successful from wherever they are comfortable shows that your business values mental health, understands the current inflation and rent crisis impacting employees, and will help your business stand out in the current fight to retain and attract talent.
If hybrid work isn’t an option and your business is mandating that all employees return to the office, there are ways you can reconsider your approach to benefits to help employees who are affected by these mass increases in rent.
Consider implementing or expanding your offering of Commuter Benefits for employees. Commuter benefits can help employees who do need to live farther from the city save on their train ticket, subway card, bus pass, or gas/tolls. This can help alleviate the financial impact of going back into the office and can help employees who have moved out of the major city hub.
Don’t forget parents
If your organization is mandating a return to the office, don’t forget about your employees who have children. In addition to soaring rent prices, another unfortunate side-effect of the pandemic is that childcare costs have gone through the roof. A return to the office for many employees means having to decide if it’s more cost effective to work and pay for childcare, or quit their job and stay home with their children. No parent should ever have to make this decision.
To help employees who have children, some organizations are beginning to offer more extensive parental benefits, like extended leave, childcare stipends, or even onsite daycare. This can help lessen costs for parents who are trying to keep up with raising rent and childcare costs.
**Invest in cost-saving tech **
In addition to offering benefits that support financial wellness, implementing cost-saving benefit solutions can help put money back in the pockets of individuals and their families. Technology that can help employees select the best benefits for their financial situation, in addition to providing cost-saving guidance year round (think: in network steerage, pharmacy savings, and claims management), can help remove some of the financial stress facing employees in their day-to-day lives.
All this to say, it’s an expensive time to live and work in America right now. For employees working in major cities, rent prices are skyrocketing, creating a challenging decision for those who will soon need to commute to the office. As HR leaders, considering a hybrid approach or reconsidering your benefits offering can help ease the financial burden facing many employees as they begin to return to the office.
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