Reducing pay or hours? How to maintain employees’ motivation by supporting their financial wellbeing
After a short-lived period of relative normality, going back into lockdown is a heavy blow for both employers and employees in England. The government has extended its Coronavirus Job Retention Scheme, which HMRC’s October 2020 figures show has already helped some 9.6 million people.
But furlough payments are no guarantee of job security; almost one in 10 of those who have been furloughed at some point had lost their jobs by September 2020, according to the think tank Resolution Foundation in its Jobs, jobs, jobs report. And the harsh reality for many businesses is that reducing hours and pay packets is the only way to survive the current situation.
Consultant McKinsey & Company’s Covid-19 in the United Kingdom (May 2020) research suggests 40% of the working population have had to accept changes to their jobs due to the pandemic, while 12% of the Resolution Foundation respondents with jobs said their pay had fallen since February.
As we enter the ninth month of the “new normal”, it’s not hard to see why employees’ motivation may be flagging – especially if they are being asked to take a pay cut or work longer hours.
So let’s take a look at some of the ways you could adapt your employee benefits programme to provide the financial wellbeing support people need during this extended health crisis.
The value of financial education
When money is tight, it’s even more important to take control of your finances and make every pound count. So, offering your employees access to advice designed to help them make the right decisions is central to improving their financial wellbeing in the current situation.
From a run down of the various Covid-19 schemes to articles that can help them nip potentially damaging behaviours such as boredom shopping – or making pointless purchases online to pass the time – in the bud, clear guidance is one way to help employees manage their “coronanxiety” and keep their heads above water.
As Lauren Muir at on-demand pay specialist Earnd says: “Little things such as putting off paying bills can take a toll on our finances, leading to penalty fees, interest charges, and potentially an impacted credit score. So, financial education can really help.”
If you are asking workers to manage on a lower salary, tailored budgeting advice based on the income they will be receiving is also likely to prove pertinent.
“Providing an accurate view of what the reduced income will be could help people to modify their budgets,” Muir adds. “Another step would be to provide access to on-demand pay so they have a safety net available if necessary.”
The importance of knowing your workforce
While financial education is undoubtedly one of the most important building blocks of financial wellbeing, it’s best used in combination with benefits that people can take advantage of to cut their costs.
However, to work out which benefits will resonate with your workforce, you need to understand how they behave as consumers.
Say you’re keen to help them ease the financial strain of their household bills, one option would be to give them the opportunity to switch to an energy plan offering preferential rates. But if the majority of your employees have stuck with the same supplier for years, you might find discounts at a supermarket chain prove more popular – especially if your data indicates which chain your workforce prefers.
Tools are available that can provide this level of insight by combining your proprietary workplace benefits engagement data with third party intelligence from sources such as consumer-marketing databases.
So, you can get a much clearer picture of how you can revise your benefits programme to help your employees through these extraordinary times.
After all, it’s those companies that provide much-needed support that will be remembered, not only by the employees concerned but also by their customers. So, put your employees first, treat them well, treat them like individuals and watch them and your business reap the rewards.
The author is Tim Brook, head of engagement & platforms, EQ HR Solutions.
This article is provided by EQ HR Solutions.
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