When COVID-19 hit our economy, workplaces were focused on reacting and responding (often in real time) to address and mitigate the fallout to their business and workforce. The toll on both has been substantial. Every workplace and every worker has been impacted, and industries like retail and hospitality and low- and moderate-income workers have borne the brunt.
Now as more states begin easing restrictions, we seem to be entering a new phase: a return to work and transformation. This provides an unprecedented opportunity for employers and HR teams to rethink traditional benefits and support ecosystems. It also highlights the importance of managing that transformation using the lens of financial health.
Before COVID-19, only 29% of Americans were financially healthy. The resulting COVID-19 financial shock almost certainly does not improve financial health, especially for those workers who were already struggling. This means that the financially vulnerable are not just in the workforce—they are the workforce.
As our economy and our workplaces reopen, it will be important to think through the strategies and programs that can help workers recover from this shock and soften the blow of future financial disruptions. Given the prior and current state of financial health, building a financially resilient workforce is more important now than ever.
While the timeline associated with this reopening phase remains uncertain, every workplace will have to navigate three key stages. We outline some of the considerations for each of those stages below, with an eye toward financial health. This crisis has highlighted and exacerbated the financial health challenges that many workers were already facing.
Stage 1: Helping Workers Return to Work
Work is foundational for financial health. It is through work and the workplace that millions of Americans earn income and gain access to other financial health benefits. Therefore, stage one is about reconstituting the workforce, including rehiring those who may have lost their jobs or been placed on furlough.
Organizations will also have a number of practical and strategic decisions to make about how to safely operate. For example, for organizations with brick-and-mortar operations, understanding and following Centers for Disease Control and Prevention (CDC) guidance on cleaning, potentially adjusting hours of operation, and training or retraining workers on new safety procedures will be top of mind.
One of the most important decisions will be when, how, and if to migrate away from a distributed workforce (aka “work from home”). Individual circumstances will vary widely, as some workers will have partners or spouses who have been disproportionately impacted, childcare institutions and schools may not be opening at the same time with compatible hours, and personal health issues may also make it harder or impossible for workers to leave home and enter a more public environment.
These are complicated questions with multiple variables. Maintaining flexibility and adjusting quickly will be paramount. Rebuilding the workforce will take time, and having a flexible approach will ultimately benefit both workers and workplaces.
Stage 2: Near-Term Benefit and Total Reward Decisions
With workplaces ramping up their staffing, they are also going to face key decisions around what their benefit and total reward programs will look like in the near term. Some workplaces—primarily large employers—took steps to enhance their financial health benefits in the immediate aftermath of COVID-19. These enhancements included pay raises, bonus payouts, access to hardship funds, and expanded paid-time-off and sick leave programs.
For many employers, however, it is reasonable to assume that benefit and total reward budgets for the remainder of this year and 2021 may be constrained. In other words, at a time when financial health is more relevant than ever, workplaces may face challenges in maintaining, let alone adding, important financial health benefits.
As workplaces wrestle with these questions, there are a number of financial health solution providers offering their services and platforms for free during this time. This includes access to financial coaching, debt counseling, education, early wage access, and other liquidity-based options, which may help workers manage this tumultuous time. Each workplace will need to evaluate what makes the most sense, but there are options and solutions that can help workers and workplaces in a cost-effective manner right now. Employers are advised to reach out to these providers to see what the best option is for their companies.
Stage 3: Building a Financially Resilient Workforce
COVID-19 has underscored the importance of doing more to build a financially resilient workforce, one in a better position to absorb financial disruption without mass calamity. Stage three will give workplaces the chance to reset and transform their workplace financial health programs. Key aspects of this transformation should include:
- Broadening the elements of workplace financial health: This crisis demonstrated that workplace financial health is broader than retirement, insurance, and education programs. The responses from employers that have been able to take action highlight that financial health also includes compensation, incentive pay structures, emergency savings support, financial coaching, and support for daily living activities like child care or paid sick leave.
- Understanding worker needs to better select interventions: HR data, along with proven survey tools, can help workplaces better diagnose the financial challenges facing their workers. Enhanced diagnosis can help workplaces make better decisions on where to invest total reward dollars.
- Focus on worker experience and engagement: Just because a workplace has a financial health program does not mean workers will use it. Designing experiences from the worker perspective can help ensure that more employees benefit from the financial health solutions their workplaces provide.
- Measure impact and adjust: Measurement is not just about diagnosing needs. Just as important is establishing a framework to measure the impact of a financial health program. This can help organizations better evaluate and justify the expense for some elements of their program and shed those that do not demonstrate meaningful impact.
Workplace financial health was important before the crisis and, in many respects, will be critical as we reopen our economy and workplaces.
|Matt Bahl is Vice President and Head of Workplace at Financial Health Network. In this role, he leads market development and workplace strategy efforts across the organization. Bahl is deeply committed to the goal of helping improve financial health for all and believes work and the workplace play a key role in making that goal a reality. With over 15 years of financial services, consulting, legal, and Human Resources experience, Bahl understands the impact that work and the workplace can have on improving worker financial health.|