Balancing the wellbeing of employees with the devastating economic impacts of Covid-19 (Coronavirus) has been an unparalleled challenge for many employers over the last year. With Covid impacting the incomes of people across the country, both directly and indirectly, helping restore employees’ financial wellbeing should be at the top of many organisations’ to-do lists.
Yet research suggests that even a year into the pandemic, around half of employers still do not have a policy on financial wellbeing. This increases to 64% among traditionally lower-paid sectors, according to the Chartered Institute of Personnel and Development’s (CIPD) Reward management survey, published in March 2021, many of which have been disproportionately affected over the past 12 months.
We estimate that 2.87 million people affected by Coronavirus are now at high risk of long-term debt problems, something that should pose a real concern for these organisations. More than half of those coming to Stepchange last year were either employed or had a partner in employment so it’s evident that being in employment does not always equal financial security.
That’s why an up-to-date strategy for supporting employees’ financial wellbeing is going to be key to recovery and productivity as we emerge from the pandemic.
What an effective financial wellbeing strategy looks like will differ depending upon the organisation. They can range from simple measures like signposting to free financial advice, to offering interest-free loans to staff to support them during costly life events. With these just the tip of the iceberg, it’s well worth exploring what measures the organisation could implement.
One newer financial support mechanism some employers have expressed interest in is Employer Salary Advance Schemes (Esas), whereby employees can access their earnings at any point during the month, rather than receive regular payment on a fixed date. In principle, these could be helpful, particularly where they’re presented as an alternative to high-cost credit like payday loans that have the potential to worsen a person’s financial situation.
It’s important though that Esas aren’t viewed as a silver bullet for employee financial wellbeing concerns. Instead, they should form one small part of a wider strategy and be closely monitored to ensure employees frequently accessing the service are signposted to long-term ways of addressing any underlying financial issues, such as free debt advice through an organisation like Stepchange.
Ammer Malik is senior business development manager at debt charity Stepchange