Financial, health or family-related crises can affect employees at work, and employers need to have support mechanisms in place, says Sam Barrett
The impact of the credit crunch on businesses has been well documented, but the problems it raises for employers could go much further than their bottom line. Many employees could also be affected, including those in well-paid roles.
According to figures published last month by Transact, which co-ordinates the activities of about 1,200 debt advice centres around the UK, some advice centres in affluent areas have seen increases of up to 500% in the number of people seeking help. And the charity Community Money Advice, which helps to establish and support money advice services, has reported an 85% increase in the number of people seeking financial help in the eight months to December 2007.
Many employees may be struggling to manage their household budgets, when faced with higher prices for essentials such as food, utilities and petrol, plus higher credit interest rates and increased mortgage or house rental payments. This could be a problem even for those in a secure job and earning a good salary who have become used to a high standard of living, perhaps funded by credit cards.
On the face of it, such problems may not seem like something for employers to deal with. But all too often, personal issues in employees' home lives, such as financial problems, a close relative with a serious illness or a burglary, can distract them from their work, inevitably impacting on their productivity and performance — and that's if they are able to come in to work at all.
The prevalence of personal problems in the workplace is illustrated by research from Axa Icas. An analysis of the calls made to its employee assistance programme (EAP) found that relationship problems were the number one reason for staff seeking help. Eugene Farrell, business manager at Axa Icas, says: "At the moment, we are also seeing a growth in calls relating to housing, whether about a rental agreement or, increasingly, to do with people falling behind on their mortgage payments."
For many employers, the knock-on effect of employees' personal problems makes it essential to offer staff support. Organisations that provide such measures are also likely to be seen by staff as 'caring' employers, which can help with recruitment and retention.
One option for employers looking to support employees with financial problems is to offer hardship, or benevolence, funds. Gill Knowles, senior business manager for advisory services at Acas, says: "These are often provided through trade unions, or a public sector organisation may have a benevolence fund for employees in financial difficulties."
Interest-free loans are one of the more common options. When Vodafone employees were affected by last year's flooding, for example, the company offered interest-free loans of up to £5,000 to staff, as well as reimbursing them for any out-of-pocket expenses incurred, such as the cost of a hotel if they were unable to make it home.
But where such financial support mechanisms are in place, it is important that employers have transparent criteria about who can use them. This will ensure they are perceived as being fair.
Financial education
In some cases, employees may be able to solve their own financial problems by tightening their belts and re-evaluating their monthly expenditure. But this is often easier said than done, and they may need financial education or advice to point them in the right direction.
Whatever problems staff are battling with, their concerns are likely to be a source of worry and stress, which can affect their physical health as well as their performance at work. In extreme cases, individuals may also be moved to consider suicide if they cannot see any way out of their situation and do not have anywhere to go for help.
Employee assistance programmes (EAPs) or other types of counselling service may be an initial source of support, offering staff someone to speak to about their problems. EAPs can provide access to confidential advice and information on a range of matters, such as divorce, and legal problems.
But Richard Doig, regional director for compensation and benefits at Heath Lambert, says: "You need to be careful when selecting an EAP. Some are cheap and cheerful and cover only a few areas of advice. When we choose an EAP for a client, we look at how many areas it covers, as well as whether it includes face-to-face counselling sessions."
In addition to offering a telephone helpline and face-to-face counselling, more comprehensive EAPs can provide other means of support. "We have a range of factsheets, also available online. An employee may be able to get the support they need from these without having to call the helpline," says Doig.
But employers should bear in mind that there is still some uncertainty about how EAPs should be taxed. Historically, the benefit has been regarded as tax exempt, but an announcement by HM Revenue & Customs (HMRC) last summer indicated that EAPs should be taxed as a benefit in kind if they include advice on legal and financial matters, for example. HMRC is due to make a final decision on the tax status of EAPs soon.
Making use of an EAP or counselling service offered through the workplace is still perceived as having a stigma attached to it among some employees. The way it is presented, therefore, may increase its effectiveness. Mike Dios, managing director of Vielife, says it should be clearly labelled as a service that is separate from the employer. "If employees think the service is run by the employer, they will be much less likely to use it," he says.
Good promotion is also key to guaranteeing that an EAP is used. Word of mouth is one of the most effective means of raising awareness, but regular campaigns in the form of posters, newsletter content and emails can help increase usage. In some situations, more specialist counselling will be required, however. For example, banks often have trauma counsellors on standby in case an employee is involved in a hold-up and needs counselling.
Trauma counselling can also be brought in on an ad-hoc basis. "The death of a colleague can seriously affect employees. We recently supported an organisation where an employee had committed suicide. Within 12 hours, we had bereavement counsellors on site so employees could talk about how it was affecting them," says Dios.
But staff will not always want to talk to someone connected with work. Gill Knowles at Acas, says: "It's worth putting together lists of organisations that can help."
These include the Citizens Advice Bureau, Relate and the local Alcohol and Drugs Advisory Service. If staff have such contact details at their fingertips, they may seek help much earlier than if they have to seek out this information themselves or of they don't know such organisations exist.
BT regularly supplies its staff with details of organisations they can turn to in a crisis. Diversity manager Sally Ward says: "Each year we put together reference booklets that provide employees with tips and advice on a specific problem."
Last year, for example, BT put together a booklet on caring, including details of some agencies that might be able to help if staff needed to care for an elderly relative. "It might not be something they need to worry about now but, if they do need to look after someone, they will know where to find all the relevant information," Ward adds.
Although this type of service can help employees access information and support in times of crisis, sometimes the situation will require them to take time off work. This could be the case if they need to look after a sick relative, or their home has been burgled.
Offering paid leave to employees who need to deal with a crisis is common, especially for bereavements over close family members or to attend funerals. But Stephen Seymour, office manager of the Manchester branch of human resources and recruitment consultancy The Urquhart Partnership, says employers must be careful how they operate these policies. "There are lots of things that could fall under the term 'crisis', such as an employee's home flooding or marital breakdown, so there have to be clear parameters about the definition of crisis, otherwise the policy could be open to abuse."
In some cases, however, taking too much time off can sometimes add to the problem. Tony Urwin, general manager of Bupa Psychological Services, says: "There is some debate over how long someone should be off. Some train companies give a mandatory two weeks if a driver witnesses a suicide but, for some employees, it might be easier for them to come back to work sooner, allowing them to re-establish their routine and benefit from the support of colleagues."
Flexible working arrangements can often work well in such situations. Mike Blake, group sales manager at PMI Health Group, says: "If someone is looking after a sick child or visiting a relative in hospital, they might benefit from shifting their hours or working from home, if possible. They will be able to manage the situation better without having to worry about falling behind with work."
Concierge services can also be useful to support staff, says Dios. "A concierge service can be used to help an employee get through a crisis, taking care of day-to-day responsibilities such as the laundry, dog walking and shopping, while they focus on other things."
Serious illness
But if it is an employee who becomes seriously ill or is involved in an incident, such as a road traffic accident, benefits such as private medical insurance (PMI) and even healthcare cash plans can provide support in helping to fund and access treatment much more quickly than they if they had to rely on the National Health Service (NHS). Some employers also enable staff to extend these benefits to cover dependants, typically through a voluntary or flexible benefits plan.
Group income protection and critical illness insurance are also designed to deal with such situations. The latter, for example, pays out a lump sum if an employee is diagnosed with a serious condition.
Income protection, meanwhile, covers the cost of paying an employee's salary for as long as they are unable to work. To make the benefit more affordable, a number of employers are moving away from offering it to staff until they hit retirement age and are instead offering schemes with a limited payment period, for example two or five years.
As well as providing a payout in the event of a claim, benefits such as critical illness cover, group income protection and life assurance often come with complementary support benefits. "Some group life schemes have bereavement counselling and on Canada Life's income protection plan, there is access to a service called Best Doctors. This gives employees and their families access to a second opinion from one of the world's most respected specialists in that area of medicine. This can be extremely reassuring," says Blake.
To avoid being caught on the hop by unforeseen circumstances, such as flooding, which are outside employers' control but can pose many problems, it is sensible to have broader crisis management plans in place that can be rolled out immediately when needed. Axa Icas's Farrell says: "Think about some of the situations that could happen and consider what action you could take. If there was a flood, for instance, this could affect more than one employee and your plans will ensure they are all treated equally."
Having a plan in place can help to ensure things return to normal as quickly as possible.
Whatever support package employers offer, it must be reflected in the organisation's culture if it is to work successfully. "You need to encourage employees to speak out about their problems," says Bupa's Urwin.
He recommends training managers to identify the signs and symptoms of staff with potential problems, as well as coaching them in how they should deal with staff who are going through a hard time.
"Even if all they do is refer them to another support mechanism, this empathy can make it much easier for the employee to cope with the problem," he adds.
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Prevention
Although it is not possible to prevent some crises, such as a fire, flood or relationship breakdown, there are some benefits employers can provide to help employees avoid some potentially traumatic situations.
A prime example of this is health, especially because the first signs of a serious condition, such as heart disease or cancer, can be lurking long before someone develops any symptoms.
Richard Doig, regional director for compensation and benefits at Heath Lambert, says: "Health screening used to be a perk for senior directors, but it is becoming more popular across the board. As well as full screenings, a larger organisation might want to bring a screening company on site to test blood pressure or cholesterol, for example." Online health assessments, such as those offered by Axa Icas and Vielife, or Bupa and Norwich Union alongside their private medical insurance plans, can also flag up warning signs.
These ask a series of questions about an employee's health and lifestyle, then produce a personalised report highlighting areas of concern and steps the employee can take to prevent possible future problems.
Some personal financial or debt problems can be prevented by providing financial education or advice in the workplace. This can be arranged by linking up with a firm of independent financial advisers to provide one-to-one or group sessions for employees, or by using one of the online financial training programmes.
Axa, for example, offers a free package, My Budget Day, which takes users through basic financial planning concepts such as budgeting and dealing with debt.
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Case study
Kellogg's offers serial support
With its roots in improving health through diet, it is perhaps not surprising that Kellogg's is committed to supporting its employees as much as possible in times of crisis.
Jacqueline Grainger, UK HR director, says: "We believe it is important to create an environment where work and life commitments can be properly balanced and support is given to employees in times of need." Kellogg's, which employs about 2,000 people in the UK, offers a number of support mechanisms, including counselling, flexible working arrangements and unpaid leave. To ensure staff can access this support easily, there are advisers throughout the organisation who can help them with their problems. Line managers are also trained to coach people and offer flexible working where this can help.
"We also offer employees special types of leave in order to support them in certain circumstances, perhaps to look after ill dependants," says Grainger.
If a dependant is ill, for example, an employee can take a couple of days' unpaid leave to look after them. Longer periods of unpaid leave are also possible if an employee needs to take time off.
Long-serving staff are entitled to additional support mechanisms. After 25 years' service, for example, Kellogg's employees become members of the 25 years club, which gives them access to a trust fund should they find themselves in financial difficulty.
Retired staff are also looked after with regular visits and meetings to identify whether they need any help.
"Supporting employees and retirees is important and vital to the success of our business," adds Grainger.
