The Covid-19 pandemic has had a negative impact on many organisations’ finances, yet many employers do not have suitable financial wellbeing programmes in place. That’s one of the main findings from new research by the Chartered Institute of Personnel and Development (CIPD).
According to the CIPD’s latest Reward Management Survey, eight in 10 employees believe the pandemic has negatively impacted their employer’s finances. However, nearly half of organisations do not have financial wellbeing programmes in place.
The survey also revealed that workers in the retail, hospitality, catering, leisure and cleaning industries were more likely to say their organisation’s finances had suffered.
Only a fifth of employee survey respondents said the pandemic had actually improved finances for their employer, while 11% said they believe it has had no effect at all.
As you’d probably expect, those organisations that had been negatively impacted financially by the pandemic were the least likely to increase their employees’ pay during 2020. They are also less likely to hand out pay rises to staff this year.
In fact, just under a fifth (19%) of employers that reported a ‘very negative’ impact on their finances were still able to give employees a pay rise. Meanwhile, half of those that reported a ‘very positive’ financial impact gave all their employees a pay increase.
In 2020, two-fifths (41%) of employers deferred a pay increase decision for all staff. A further 23% did so for at least some staff, depending on factors such as whether they were furloughed or covered by the National Minimum Wage.
In October 2020, when the CIPD carried out the research, almost three-quarters of organisations said it was too early to decide on pay rises. Having said that, over half (53%) said pay rises would be applied to some employees this year, while just 15% said all staff would see their pay increase.
Sadly, only 13% of employers said they would compensate employees for making cuts during the pandemic. The majority of those that said this said they would do so by offering employees development opportunities.
The CIPD survey also revealed a rather sad picture in terms of how well organisations understand their employees’ financial wellbeing. Indeed, more than half of employers said they had not collected data on employees’ feelings about their finances and they did not have any plans to do so. Public sector employers were most likely to have asked employees about their financial wellbeing (48%).
Strikingly, almost half (49%) of employers have no financial wellbeing policy in place. This is alarming considering that financial wellbeing programmes can not only positively impact employees’ health and wellbeing, but also their work performance by helping to alleviate ongoing concerns about money.
Where organisations had introduced financial wellbeing programmes for employees, the CIPD found that:
When it comes to improving financial wellbeing, the CIPD urges employers to “get the board on board” about discussing the financial health of employees and for them to be more open about the financial situation the organisation is facing.
Do you currently have financial wellbeing programmes in place for your employees? The CIPD research paints a clear picture. Have a chat with us to find out exactly what’s available.