The coronavirus pandemic brought on unforeseen challenges nearly overnight, and it is evident that the impact will be long-lasting. Data shows that 74% of employees are concerned about at least one aspect of their well-being as a result of COVID-19 (financial, social, mental, physical) and a majority of them (52%) are most concerned with their financial health.
Financial stress is at an all-time high as layoffs and furloughs across the nation have left many employees questioning the stability of their employment. A 2019 Stress In America study from the American Psychological Association found that 64% of adults identified work and 60% identified money as significant sources of stress, making them the most common personal stressors. A more recent survey would likely paint a bleaker picture.
Another alarming statistic is that 2/3 of Americans could not pass a basic financial literacy exam. For many, financial training was never a part of their formal education prior to entering the workforce. When they did enter the workforce, they were forced to balance student loan debt, living expenses, long-term financial planning, and maintain their financial stability for the first time with minimal knowledge or guidance.
These financial demands have led to rampant chronic economic anxiety within households across the nation that has only been exacerbated by the effects of COVID-19.
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What is keeping employees from improving their current financial situation? Is it understanding how to manage debt? Knowledge and information about mortgage/auto loans? How to choose the most beneficial savings program or invest effectively? Access to money management resources? All employees are on a unique, highly personal financial journey; offering the right resources to meet them where they are and continuing to increase their financial health is key.
How can you help your employees right now?
Communicate. Inform your employees of current business objectives and forward-looking expectations. Encourage open communication about any concerns employees may have for the well-being of themselves, their families, their colleagues, customers, or communities. Clearly communicate the escalation structure should concerns arise and define the roles of your leadership/management team.
Modify existing benefits. Make sure your employees are well-informed regarding the benefits available to them. This could include financial or mental health counseling, employee assistance programs, affordable telemedicine, HSA and FSA options, extended health plan coverage, paid time off and sick leave policies, etc. If possible, adjust your benefit plans to allow easier access to resources for your employees. Discuss any changes to benefits or pay with your legal or financial advisor and review any applicable plan documents.
Foster teamwork. Your employees are your greatest asset. They may be willing to make sacrifices today if it means tomorrow’s survival. Ensure you have the right tools and processes in place to keep your employees engaged and productive while they work from home.
Offer financial wellness support and services. Provide your employees with financial education resources, online money management and budgeting tools, financial counseling and financial solutions like early wage access, short-term loans, and student loan services. They need your help navigating these uncertain times, and they need resources to support them financially.
Make financial wellness a priority
Most organizations have experienced a level of transition to a virtual working environment, which demonstrates concern and support for their physical well-being and health. Stress levels are heightened, and the number one cause of stress is money. This is why employees need access to financial wellness resources now more than ever, and that starts with employers. Employers that currently offer a financial wellness program need to make sure their employees are aware of the resources and know how to access them.
By giving employees the tools and resources to cope with their current financial situations and make better financial decisions, they will feel confident that their health and well-being are high on their employer’s priority list. As the world continues to work its way through the COVID-19 pandemic, employers’ ability and willingness to support employees’ financial health and well-being will prove more valuable than ever.
David Kilby is President/CEO of FinFit, a fintech company that provides over 150,000 employers with a unique financial wellness benefit platform.