Even prior to the COVID-19 outbreak, money was the leading cause of stress for Americans. As this global pandemic escalates, finances have quickly become the primary focus for even more Americans. Every individual has a unique financial situation and though some are feeling the effects of the COVID-19 crisis more than others, everyone has felt the impact in one way or another.
As an organizational leader, it is your responsibility to lead with a focus on well-being. As you make decisions related to COVID-19 and adjust your business strategy, share that information with your employees. Transparency is key, and if your employees feel like they are out of the loop, they will become increasingly concerned about their position and future with your organization. Knowing how they fit into the bigger picture will add clarity, reducing the stress and mental anxiety they can feel during this challenging (and ever-evolving) situation.
Employees need to know they have your support, and they need the proper tools and resources to empower them to deal with the financial and emotional strain they are experiencing. During times of heightened financial stress, it’s even more difficult for your employees to focus on the most effective, appropriate actions. Most of them are struggling to adjust to their new normal, taking it day by day. They rely on you for guidance, both inside and outside of the workplace.
Financial wellness and physical wellness have always been closely tied, but now they have become nearly inseparable. A John Hancock study revealed that financial stress is triggering physical and psychological symptoms like anxiety and sleeplessness for roughly 60% of workers and for 85% of workers, managing their stress is a key factor in participating in a wellness program. Financial wellness resources help guide individuals down the path to financial stability, reducing stress and giving them the ability to refocus on other tasks at hand. Raising awareness and caring about employee wellbeing through emotional intelligence training is a solution that can have a positive impact in the short and long term once the crisis slows down.
However, the unprecedented and uncertain times we’re facing requires a different type of attention to our finances. Your employees likely have new variables to factor into the equation, requiring a different type of knowledge and consideration. Short-term necessities have taken a higher priority than long-term planning.
Here are a few things you can encourage your employees to do now:
- Re-evaluate their budget (or create one). Today’s economic situation is completely different from just a month ago. Now is the time to reassess monthly expenses, starting with necessary living expenses such as mortgage/rent, utilities, health insurance premiums and groceries. Their expense allocation may have changed given the current situation; though they may be spending less on dining out, that may equate to more in grocery expenses. Stretch available funds as far as possible by eliminating any expenses that are ‘nice-to-haves.’ Maximize the use of government funding available to them.
- Establish or contribute to an emergency savings fund. Once they create their new budget, they will be able to determine what they can comfortably put into savings each month. The standard best-practices, like “always have three to six months living expenses available,” don’t necessarily apply right now. It may be advantageous to create more than one savings account: a shorter-term account that they could withdraw from, and a true emergency fund that they only intend to touch when absolutely necessary.
- Utilize forbearance and forgiveness options. Americans now have forgiveness on their tax return filing and payments as the deadline has been extended to July 15, 2020. There are federal programs in place for student loan relief. Many banking and credit institutions are offering paused or reduced payment plans.
- Take advantage of their employee benefits. Educate your employees on the benefits you currently offer and encourage them to take advantage of all available resources. This could include financial or mental health counseling, employee assistance programs, financial wellness services, government programs and funding assistance, etc. One-on-one financial counseling is an invaluable service you can offer to your employees during this crisis. Certified financial counselors can provide expert guidance and recommendations to employees going through major life transitions. They can help them reassess their budget, evaluate and prioritize expenses, answer questions about job loss or how to handle specific debt concerns.
If you have been thinking about offering financial wellness services, what better way to greet the return of shell-shocked employees with an employer-sponsored financial wellness benefit? Not only can they rely on you for continued employment, they know you care about their health and well-being and are willing to put them first. When this Coronavirus (COVID-19) crisis passes, prepare to welcome employees back with support for their financial well-being. They will need it.
Author
Dave Kilby, a financial expert and President of FinFit