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17 Jun 2020

Why regular contact with furloughed employees is key to their financial wellbeing

Even though lockdown is easing around the globe, we all know this pandemic is far from over – especially for those who were furloughed by their companies. As of 29 May 2020, the Treasury have announced the furlough scheme is to be gradually tapered down, with employers gradually paying more staff costs. The overall furlough scheme is expected to finish at the end of October, when things might get back to some level of normality.

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But the end of October is still five months away. With some employees having been on furlough since March, it’s probable there are some individuals out there who are really struggling with their finances.

So, what can employers do to support the financial wellbeing of their employees during this time?

Education

These days, the idea you ‘never talk about money’ to your family and peers has by and large disappeared from public sentiment. The days when employers paid their employees salary (and not much more) have disappeared and we believe it’s up to employers to provide the financial education their employees’ need– especially those who’ve been furloughed.

Salary Finance recently surveyed more than 2,500 UK employees and asked them what type of financial support they’d like from their employers. The results were:

  • Help for those struggling with borrowing or bills (49%)

  • Help for those with loss in household income (47%)

  • How to reduce spending and make money go further (24%)

In light of these statistics, employers should start by holding online webinars on topics such as debt management, managing your money in times of crisis and the importance of holding cash savings now and into the future – just for times like these. Perhaps go one step further and gather your own data – what are your own employees feeling like they need from you during this time? These figures lend a significant insight into how you, as an employer, can tailor resources to suit your employees.

Start a conversation, stay in touch

There’s never been a more important time to stay in touch.

There are individuals in your workforce who may live alone, who might live with vulnerable relatives, who are struggling with personal issues - and being furloughed may have added to the stress they’re experiencing. Think broadly and diversely – whatever their circumstances. An individual’s mental health can have a great effect on their financial wellbeing. As an employer, it’s critical to understand these intersection points between mental health and financial wellness so you can listen and really provide the tools needed to help your staff.

Having an ongoing communications plan with these individuals is invaluable. As well as through the normal communication channels, the importance of receiving personal contact from their line manager can make a significant difference in how connected an employee feels to the firm.

Encourage your senior leaders to ask whether their staff are having any financial difficulties associated with being on furlough and create signposts to resources that can help employees in this positioning. Maintaining a positive employer-employee relationship based on trust and commitment can help your staff feel supported, and could contribute to increased engagement once they’re back at work too.

An online forum

Create a financially focused, internal forum to showcase resources, articles, and benefits for employees to refer to while they’re on furlough. Post links to verified sources that give different perspectives on financial advice and signpost resources that might be able to help them.

For example, your firm’s Employee Assistance Programme (EAP) package, that’s usually offered as part of a firm’s benefits package and provides confidential information, support and counselling, is a great resource to communicate to your staff. Make sure you understand all the benefits your EAP scheme offers so you can communicate this clearly. As well as more typical financial advice, EAPs can help smaller salaries go further by helping staff to save money on everyday purchases such as the supermarket shop. Keep an eye on new discounts that are added, and highlight these to your staff on the forum if you think they’d be helpful for their finances.

Understand the differences

Financial guidance can come in lots of different packages. But, so can the employees at whom you’re targeting your messaging.

For those younger employees who are at the beginning of their career, it might be they just want general information and webinars on household finances and debt. For those who are closer to retirement, things can get trickier. These individuals are often most worried about their immediate future – especially when they’ve been furloughed. Make sure you know the implications of furlough on their pensions and include weekly investment and market updates on your online hub so they can monitor their pension investment performance. Provide solid information in the form of webinars that they can go to if they have more personal questions.

In addition, don’t forget the higher earners in your organisation. Anyone earning over £37,500 per year will have seen over a 20 per cent drop in income from being furloughed, and this can hit a household – hard. Research some budget tools to recommend to your employees, see if there are any other measures from third party organisations to support people financially and finally, don’t forget the scams. With over a 400 per cent increase in coronavirus related scams since the beginning of the pandemic, ensure you signpost how employees – especially those in financially vulnerable positions – can avoid becoming victims.

Regardless of how an employer chooses to support their furloughed workforce, making an impactful difference is what matters. Above all, ensure to regularly check-in with all your furloughed employees to ensure you’re doing whatever you can to help them while they’re away from work.

This article is provided by Hargreaves Lansdown.

In partnership with Hargreaves Lansdown

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