Spotlight on coping with employees’ financial hardship

A survey by recruitment site CareerBuilder.co.uk found that 37% of staff live for pay day and struggle to survive on their salary, and that 33% are unable to set aside any cash for savings.

For HR professionals, budgetary constraints may mean they cannot make the pay cheque any bigger, but planning ahead and maximising the benefits you offer to staff could ease the burden, according to Rosemary Haefner, vice-president of HR at CareerBuilder.co.uk.

Loans and counselling

“Companies need to be creative and promote a work environment that thinks about its employees holistically,” she says. “Although companies are not responsible for each employee’s financial habits, they can send a message that they care.”

The Carphone Warehouse worked with the Employee Advisory Resource, one of the leading providers of employee assistance programmes, on a short- and long-term approach to alleviating staff issues with money. The company offers a hardship loan and counselling to uncover any underlying issues.

Christina Jauregui, head of compensation and benefits at Carphone Warehouse, says: “It is more important that we help staff understand how they get into debt in the first place, to protect them from getting into this situation again, and to provide the emotional support needed to make changes to their lives.”

It is not simply a matter of low-paid employees getting into debt, however. “What was most surprising to us was that not many workers plan ahead,” says Haefner.

Promote pensions

“Companies could promote pension schemes a bit more to show that they consider it to be important. The cost of living is high, undeniably, so companies could also look at offering car allowances or transport reimbursements.”

Be creative

James Bradley, director of service delivery for the Employee Advisory Resource, agrees that creativity is the key.

“Companies could offer childcare vouchers or Luncheon Vouchers, a subsidised canteen, or subsidised sandwich shops for organisations to encourage local businesses to sell their wares,” he says.

“Offering a tax reduction on childcare vouchers is an immense help as it reduces the huge cost that people with children face. Often they are working for nothing for two or three years until the child starts school.”

But surely money earned fairly by the worker is theirs to do with how they will, so why should an employer assume any responsibility?

Haefner agrees: “Absolutely, but I think a lot of organisations feel they are compensating fairly and spending money administering a pension fund that employees are not taking up. My recommendation to organisations is to stand up and facilitate it. If it is taking too much time, then find a way to speed it along. Even great pension schemes take time for people to get comfortable with.”

Bradley takes a firm line. “The responsibility of the employer is to pay fairly, and recognise the minimum wage,” he concludes.

But, he adds, if you find yourself using phrases like ‘dedication to duty’ and ‘vocation’, perhaps you’re not paying enough.

Help with money problems

• Do your research and find out where your help would be most useful.
• Offer grocery vouchers as a different type of bonus.
• Don’t wait for staff to approach you for the pension – seek them out.
• If any reward or pension administration process is so cumbersome it’s putting people off, streamline it.
• Involve your community. Ask for a reduction from local businesses for buying in bulk or establishing loyalty from your company.
• Offer a counselling service for staff with finance issues.