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How the Pandemic has Impacted Employee Financial Wellness?

HR Tech Outlook | Monday, February 22, 2021

Employees struggling to make ends meet during this health crisis or concerned about losing their jobs are more likely to delay cost-related medical care. Furthermore, such workers are less likely to perform at their best and are more likely to take more sick days off and record unplanned absences.

Fremont, CA: The coronavirus pandemic has contributed to one of the most financially difficult times for employees around the world. The comprehensive COVID-19 restrictions ravaged the global economy, plunging it to record low levels. The unemployment rate in the US peaked at an unprecedented level not seen in more than 70 years, with almost 10 million fewer people working as of November 2020.

Employees faced job losses and pay cuts that forced them into what could be described as the worst financial hardship. More than 84 percent of Americans report being stressed about their finances as a result of the outbreak of COVID-19, with about 20 percent reporting that they had received financial assistance from a charity or community support center because of the outbreak.

Given that financial stress is one of the most common drivers of stress and burnout at work, the economic effects of the pandemic may also impact employee health and wellbeing.

Employees struggling to make ends meet during this health crisis or concerned about losing their jobs are more likely to delay cost-related medical care. Furthermore, such workers are less likely to perform at their best and are more likely to take more sick days off and record unplanned absences.

To be sure, these show a striking link between the financial wellbeing of the employee and the competitiveness of the organization As a result, business owners could need to rethink the financial wellbeing of the post-COVID-19 workplace.

Improving financial literacy

The lack of financial literacy is one of the key causes of financial stress that business leaders and HR managers need to resolve.

Previously, financial health services concentrated primarily on contributions to the 401(k) plan and other benefits, and workers were left to determine the basic financial decisions themselves.

A survey conducted by Charles Schwab in 2019 found that more than 70% of the thousands of workers who participated said they had no written financial plan. Their explanations included not having enough time to make one, and not having a financial planner to help set up the plan.

Following the financial downtick triggered by the health crisis, employees now more than ever need tools and services to improve their financial health and make better financial decisions-and they are looking to their employers to provide them with these resources.

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