Over two thirds of employees say that the pandemic has negatively affected their financial wellbeing, but 49 per cent of employers don’t have policies in place to address it, according to research from the CIPD.
The CIPD’s 17th annual reward management survey focused on the impact of the Covid -19 pandemic on reward practices in the UK. Respondents were asked about the impact of Covid-19 and the economic crisis on their employees’ financial wellbeing. According to the findings conducted in October 2020, 68 per cent of organisations indicated a negative impact, 13 per cent reported a good impact, and 19 per cent experienced no impact.
The information differs per industry with 18 per cent of organisations in the legal, financial, technological, and other professional services sub-sector indicating a favourable impact, which could be due to reduced commuting expenses because these jobs can be done from home.
According to 28 per cent of businesses in the retail, hotel, catering, leisure, and cleaning sub-sector, a sector that has been particularly severely hit by the economic limitations, the financial wellbeing of employees has been ‘very negatively’ impacted by recent events.
33 per cent of businesses in the volunteer sector said there was no financial impact on their employees, which, the research suggests, might be due to financial help from their company or the government’s furlough programme.
49 per cent of employers do not have a financial wellbeing policy in place to address this impact brought on by the pandemic. But more firms are implementing employee financial wellbeing policies, with 12 per cent implementing or preparing to implement a policy in direct reaction to the epidemic, and 24 per cent evaluating the pandemic’s impact on employees’ financial wellbeing in order to identify the appropriate support.
CIPD senior performance and reward adviser Charles Cotton says: “We found quite a lot of academic research looking at this topic and showing that it could have adverse impacts on the workplace in terms of what organisations could do about it.
“I suppose the question is what’s the situation now? On the one hand, the economy has now reopened, almost fully reopened. We’ve got job vacancies. We’ve got talent shortages. Wages have gone up in certain sectors and certain occupations. Against that, we are starting to see a cost of living increase, especially around fuel and energy, and food. Later on, in April, we’ll see the National Insurance contributions that employees will have to pay.
“At the same time organisations themselves are facing many cost increases, such as employer national insurance contributions and, of course, next year, corporation tax. Some organisations may struggle to respond to those concerns.”