There is no better time to prepare for how your team will support employees’ financial wellness in advance of inevitable ups and downs, whether caused by living in the path of a hurricane or wildfire, or by more personal events that present similar challenges.
With the start of fall upon us, we are busy preparing for the changes that come with it: swapping summer dresses for our favorite chunky sweaters, getting into the rhythm of new back-to-school routines, and putting our heads down to meet year-end goals. September is also officially Natural Disaster Preparedness Month. There’s a reason for that. There is no better time to prepare for how your team will support employees’ financial wellness in advance of inevitable ups and downs, whether caused by living in the path of a hurricane or wildfire, or by more personal events that present similar challenges. Without a plan, we are forced to be reactive crisis managers (something HR leaders feel in their bones after the last few years). Offering direct financial help is an important, and underused, tool in the employee financial wellness toolkit.
People often stretch to present the most polished, put-together version of themselves at work. In recounting their weekend, they may laugh about a fun Labor Day barbeque and skip over the worrisome news they received on their way there. Even though the pandemic brought a lot of stresses to the forefront of workplace chit-chat, leaders often do not know the burdens – financial, familial, or otherwise – that shape a person’s day-to-day stresses, productivity, or ability to cope with the unforeseen.
It may surprise many that, according to national research, 60% of Americans experience a financial shock each year, and half of them find it difficult to make ends meet for months afterward. The truth is, some of that 60% are your coworkers. And contrary to what people might think, a person’s ability to cope with financial hardship isn’t tied entirely to their pay grade. In fact, a recent PYMTS study “found that 53% of those who are considered upper-income — those earning between $50,000 and $100,000 — are living paycheck to paycheck.” With inflation and the cost of living soaring across the country, it can be harder, even for high-earners, to handle unanticipated financial emergencies.
It is an HR leader's job to foster a community that supports and shepherds people through tough times and offers resources that help them thrive. This means some level of focus on employees’ financial stress. This focus presents a tremendous business case for committing resources to help employee financial well-being: “76% of stressed employees say financial worries have had a negative impact on their productivity” according to PwC’s Employee Financial Wellness Survey and it costs at least $6,000 to replace a worker who quits due to a financial crisis.
Natural disaster preparedness provides a valuable frame to think about financial wellness in a few ways:
You might wonder how to prioritize this work, especially if your company is under 100 employees. But, small companies have advantages. When an individual experiences a personal crisis – a car accident, a partner’s loss of income, a major medical event – their coworkers are more likely to know about it. They step in for each other informally, making meals for each other and covering each other’s work. Leadership’s response can also be nimble and personalized. When a natural disaster strikes, company leaders can make sure that each employee is taken care of in ways that they most need. At any size, companies have the responsibility to make sure that each employee is safe. But, with small teams, it is easier for leaders to check in individually. They are poised to make quick decisions, including:
Even so, making these decisions on the fly, in the midst of a crisis, is difficult. Companies are well advised to set out a framework, policies, and budget for this work in advance. Because, even if smaller companies can manage these policies on their own due to low volume, planning ahead is crucial in order to make consistent, fair decisions.
As a company grows to hundreds of employees, it naturally starts expanding its available perks. It becomes wise and cost-effective to launch an employee relief fund. These are charitable funds that set aside money for employees who experience an unexpected, unavoidable event that causes financial hardship. Employees can contribute to the fund, making it a powerful way to build community. Starting this activity early in a company’s lifecycle sets the tone for company culture – sending a signal from the outset that coworkers are there for each other in tangible ways. At this stage, the number of people affected by personal hardships or natural disasters may still be small, but it’s valuable to work with a third party to manage an employee relief fund. They are responsible for compliance with the relevant tax laws, take decision-making about individual cases off of your busy to-do list, and provide valuable information about how similar companies design and communicate about related policies.
Once a company reaches thousands of employees, the number of people affected by personal hardships or natural disasters often exceeds a company’s ability to manage a program internally. It is likely that employees are now distributed across time zones, languages, and cultural norms. It is crucial that any approach to supporting employees experiencing a crisis is delivered efficiently and consistently, in a structured and fair way. Working with a third-party vendor maximizes these goals and protects the dignity and anonymity of struggling employees who still want to put their best foot forward at work.
At this point, it also makes sense to have a comprehensive approach to financial wellness offerings. It’s exciting to think about financial coaching and advice, like that offered by Addition Wealth and TrustPlus, emergency savings programs, such as Sunny Day Fund, and converting unused PTO into other valuable needs or causes through a platform like PTO Exchange. Employee relief funds can be deployed alongside these other offerings in ways that provide people with robust systems to bolster their financial health today, which also supports their financial wellness in the long term.
In today’s world, it is indisputable that elements outside of our control (current events, extreme weather, economic shifts, personal emergencies) can substantively shake our financial stability. As a start-up in the financial wellness space, Canary wants to help companies be nimble – and human – in how they react to this fact.
The importance of financial wellness offerings that address the lived realities of an ever-growing, younger generation of workers is unavoidable. To be sure your company scales competitively, keeping its people and their needs at its core, it’s time to proactively assess how to be there for them when life knocks them down.
Learn more about how Canary can help administer emergency financial help to your employees.