As the COVID-19 pandemic continues to impact our economy, many workers are concerned about their financial security. The call for employers to help is loud and clear, but it can be difficult for business leaders to know what the right thing to do is — or what options are really available. To help, some of the most influential thinkers and researchers in the financial space recently held a webinar: How Employers Can Reduce the Financial Burden of COVID-19.
The webinar panel included Mariel Beasley, Principal at Common Cents Lab; Timothy Flacke, Co-Founder and Executive Director at Commonwealth; and John Thompson, Chief Program Officer at Financial Health Network. Here are the key takeaways from the session that you can bring back to your teams — and your employees — to start providing help. Not just now, but in the future as well.
Research shows that employees look to employers for help with personal financial challenges. During this time of uncertainty, employers are uniquely positioned to offer help to employees in the short, medium, and long term. The panel called out several things businesses can do to help today: one-time bonuses, extended sick pay, wage increases, and emergency grants. Companies are also offering faster access to wages, so employees can have immediate liquidity for things like childcare, groceries, and job disruptions.
In the medium term, the panel advises talking to your HR and PR teams; be bold about amplifying and complementing the public safety net that’s being created, and encourage others to do the same. Invest in making sure your employees understand the options available to them. Finally, consider making your short-term measures permanent. Supporting your employees will help them build stronger lives, and a stronger bond with you as an employer.
Employers have unique insight into which employees might be receiving cash as part of the government’s stimulus package. For many employees, this could be a substantial amount of money — one that’s very needed. However, behavioral science shows that when we encounter “windfalls,” especially in times of crisis, environmental stressors can make it hard to plan and spend in ways that benefit us.
Employers can help by reaching out to employees, and offering a nudge to start planning for the funds, and even consider saving them. Research shows that having such prompts to plan, plus a way to save, will help people better align their actions with their intentions. The panel also noted that not all employees have a place to store liquid savings. Employers can play a vital role by bringing in a bank, credit union, or fintech to address that gap.
For many people, especially those who have lost shifts or their jobs altogether, saving money simply isn’t an option right now. But for workers who still have income, trying to save — even just a few dollars — continues to be crucial, even during the COVID-19 crisis. The panel explained that this is important because families will feel the impacts of the economic downturn at different times. Research shows that having any additional money in savings is helpful in being able to put food on the table and get bills paid. So, the panel emphasizes the importance of encouraging employees who do still have healthy income to try to save, even if it’s just a little.
Once the crisis passes and employees are back on track financially, invest in helping them grow larger safety nets in the form of emergency savings. Research shows that it helps to frame savings as more than just an accumulation exercise, where you put funds away and never see them again. Instead, it’s about preparing for cases where you might need that excess tomorrow, or next week, or the next month. Giving employees the knowledge and tools they need to save money can build their financial resilience.
In this moment, employers have a unique opportunity to help their employees — not just now, but in the future. Many workers at the companies that keep our economy afloat are financially vulnerable, and have a long road ahead. It’s time for employers to step up, and enact short-term measures that help in this time of crisis, while also keeping in mind the long-term needs of employees.
You can view the full video of the webinar here. For more information on how to help your employees during COVID-19, visit Financial Health Network’s info page, these resources from Comonwealth, and this blog post from Common Cents Lab.
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