Although most business professionals do prepare for future economic hard times, it is vital for HR to aggressively plan for the potential impacts of this uncertainty on their employees and, therefore, the company. The COVID-19 pandemic and ensuing global economic downturn have put the financial condition of the U.S. in a state of turbulence.
As experts attempt to anticipate whether or not the country can expect an official recession, people are struggling to afford the essentials. In addition to the nearly 10% price hike in necessities like food, fuel, and housing, employers are also seeing a substantial increase in healthcare costs. This rise has caused some corporations to consider methods to reduce expenses including tightening budgets and layoffs. The additional pressure on businesses to cut costs means that HR departments need to be more flexible and creative when it comes to helping their employees plan for economic uncertainty.
Here are four primary methods HR and benefits professionals can use to improve their employees’ financial well-being during uncertain economic times.
Communication and Transparency
HR departments are not just about hiring, firing, and benefits. They also provide safe spaces for employees to voice their concerns and get practical advice from experts in the field. With the global economy slowly recovering, HR departments need to help employees adjust their financial plans accordingly to avoid future problems.
Communication and transparency are critical for a business to thrive in an uncertain economy. Companies should have clear strategies to outline how they will communicate to their employees about important decisions involving their benefits, as well as the stability of the company. It should also have a plan for what to do in the event of a crisis.
Regular updates are often welcome, as they encourage employees to feel they are integral and valued members of the workplace. Open communication also allows them to make necessary decisions regarding their financial well-being in real-time.
Help Managers Keep an Eye on the Big Picture
The role of an HR leader is to preserve the security of the employees, as well as the company. Although significant layoffs might seem to alleviate budgetary woes, they can result in long-term instability. They decrease the amount of institutional experience at the business, but they also destroy employee morale making it difficult to rebuild your workforce when the economy improves.
In fact, many companies that slashed their workforce during the recession in 2008 saw declining profitability. Another option is to offer programs like accident and illness insurance, identity theft protection, childcare benefits, pet insurance, etc. These provide value to the workers without really increasing company costs.
By keeping an eye on the big picture, managers can better tolerate the natural ebb and flow of the economy.
Identify and Address Employee Mental Health Concerns
Although employee mental health is known to be affected by burnout, research indicates that over 40% of U.S. citizens are also negatively impacted by financial worries. This can result in a feeling of anxiety and overwhelm. Stress from money problems decreases workplace motivation and satisfaction, eventually leading to reduced levels of attendance and productivity. Plus, those individuals with existing financial issues will be even more vulnerable in times of economic uncertainty.
Companies should survey their employees to remain aware of their evolving priorities. They must prioritize their mental health and address economic concerns while providing them with a safe environment to voice the challenges they might be facing due to financial concerns.
HR leaders can further build a community of encouragement including resource groups, recognition programs, and rewards.
Provide Resources to Promote Financial Literacy and Improve Retention
To prevent problems in productivity and improve employee satisfaction, companies can provide benefits that include money management coaching and financial planning workshops. Studies show that nearly 80% of workers dealing with money problems find themselves distracted while on the job. This can lead to a dip in productivity that results in further feelings of overwhelm and job dissatisfaction.
A financial planning program that provides access to financial advisors and education can help team members set realistic targets and save for the future at every stage of their careers. By connecting employees to resources, such as qualified coaches and peer groups, HR leaders can help employees navigate these tough times.