This article originally appeared in Global Banking & Finance Review on July 27, 2022.
It’s tough not to feel like – when it’s not one thing, it’s another. We thought we had gotten through the pandemic, and then — nope, not only is it not quite over but the war in Ukraine and rising gas prices, inflation, and potential recession are creating a whole new set of worries. It can feel like there’s no respite in sight. We’re managing this at home as best as we can, and simultaneously, we need to figure out what it means at work.
The silver lining of these clouds really is that we are getting stronger. The lessons we learned during the pandemic have direct applicability to what we need to do now to manage the next challenge. One area where we made great strides during the pandemic is thinking about what benefits workers need most. The baseline is a living wage, certainly, but beyond that, we now see companies adding mental health supports, flexible work locations and hours, and, increasingly, a set of financial supports that acknowledge that a paycheck is just the first step toward financial security.
One of these that should not be overlooked is an employee relief fund. Even before the pandemic and current bout of inflation, a majority of Americans (including those with full-time employment – and including those on your payroll), were not financially prepared for an emergency. Living in the path of a hurricane, or experiencing a more personal trauma like a major medical event, can derail these families’ lives in ways that are tough to bounce back from. In fact, even way back in 2015, 60% of Americans experienced a financial shock annually, and half found it difficult to make ends meet for months afterward. It’s hard to imagine that the last few years have made this less the case.
As a result, organizations of all sizes are offering employee relief funds to help employees in times of economic and financial crisis. Why? Quite simply, corporate leaders, CEOs, and HR executives understand that providing offerings that go beyond a paycheck including financial assistance during emergencies helps them build a stronger company culture and sense of community. It makes a real difference when employees know their employers have their back in times of crisis.
Many employers set up emergency funds that they thought might be short-lived, to help their people get through the pandemic a bit more smoothly. But, now, employees are feeling the effects of inflation every time they go pump gas, stock up on groceries, pay rent, etc. As it becomes harder for some to afford day-to-day expenses, many also have a lower threshold for when unexpected costs become a financial crisis. Without enough personal emergency funds or support systems to catch them, even the most financially responsible people can fall on hard times. In fact, 36% of Americans don’t have $400 in the bank for emergency expenses.
The reality is, no one is immune to financial hardship. Many people are forced to turn to alternate fundraising programs like GoFundMe to help when times get tough. But in recent years, employers are realizing the role they can play and how financially supporting and aiding their employees is one of the most important things they can do.
Employers have found that enacting employer-sponsored emergency funds has done wonders for their company’s culture and employee well-being. “They [our team] feel so supported and love that GreenPath puts their money where their mouth is,” says BreAnne McPhilamy, Employee Experience Manager at GreenPath Financial Wellness. “We don’t just support people in their financial wellness externally, but also internally. It’s a great way to take care of your people, keep them engaged, and keep them feeling supported by your employer.”
Drew Edwards, CEO of Ingo Money, saw similar reactions after enacting a relief program at his company. “HR is excited about this because we’re seeing benefits not just from the recipients, but the feeling that we’re getting from employees, the pride that we’re getting from employees because they work for a company that cares enough to put a program like that in place, and their ability to feel like they’re helping the other employees is a huge benefit.”
So how, as an employer, can you start financially supporting your employees?
Set your goals and assess your needs/limitations.
As with any plan, figure out what exactly you want to accomplish. In this case, you want to offer your employees access to emergency cash if and when they need it. Work back from here, and begin asking yourself questions. How much aid do we want to offer per person? Where will this money come from? Will you start the fund with seed money and open it up to employee donations? Can we utilize existing programs? What qualifies as a hardship?
Seek a third-party expert/resource.
Align yourself with a third-party company that works in employee relief funds that can help you get on the right track and answer a lot of these questions. Additionally, working with a third-party platform means that your organization doesn’t have to worry about IRS regulations, fairness in access to grant money, or administrative costs of running an internal program. All you have to do is assess your workforce and create a plan that works for you and your company.
Remember why you’re doing this.
Embarking on something like this might seem overwhelming, but don’t let that stop you. With the right team and platform supporting you, you can make this work for the betterment of your company.
While traditional perks include take-home vehicles, time off, and allowances for uniforms, fuel, and phones, in this new age of offerings it could also include financial relief funds that help you and your employees sleep easier at night. The point is to not overlook the importance of offering more than just a paycheck and traditional benefits. Supporting employees with more nuanced, impactful resources shows you’re listening to their needs and care about them as a whole person, in and out of the office, and is key to sustaining employee trust and well-being.
Organizations can set themselves apart as an employer of choice by acknowledging that parts of their workforce will eventually experience life events that negatively impact their financial health. It could be a natural disaster, or death in the family, whatever it is, for most people, there’s a risk of unexpected emergency costs. At the end of the day, those emergencies can cause financial troubles that are hard to recover from without the right money at the right time. Employers that take a proactive approach and offer timely financial resources will be appreciated by your employees and help retain talent that can be costly to replace in the long term.
