Companies spend serious money on attracting the right employees to achieve business goals. Yours will be no exception. Part of that effort is positioning the company as an attractive employer. Marketing is not buying airtime but walking the talk; what do employees experience and how do they rate that experience in the public domain, such as via social media. The package that you convince candidates with does not only contain the “hard stuff” like pay, days off, a company laptop and phone. Indeed, for most employees today, the hard stuff is a hygiene factor. Without a good score you will simply not be considered. So it is the soft stuff that fuels your corporate attractiveness. What team, what place to learn, and what experience do you offer your candidates?
In short: a great place to work. Once employed, though, many employers consider that the rest is up to the employee. Make your own career, take the opportunity when it comes along, educate yourself, be a team player.
Although, for the vast majority, this works fine, there are circumstances where life takes a different turn.
Sometimes disaster hits someone. A severe event, resulting in higher expenses or sudden fluctuations in income. Things can go from bad to worse for no good reason. And when they do people do not all respond in the same way. Scientific research shows that people with money problems show loss of intelligence.
This may result in making professional mistakes. There are situations where a company can afford a mistake, but there are few where the firm can endure it. So it may result in the company repositioning the employee, or ultimately terminating the employment. This often leads to destroying human capital value, including in situations where it could have been avoided if timely action had been taken.
Employers taking responsibility: a win-win
When an employee loses employment, financial planning can provide tailor made insight into the financial future, what possibilities there are to manage the change in income, and offer suggested actions. We see several employers providing this service. This results in cases where employees, despite having lost their jobs, continued to provide positive references for the employer.
Some companies provide financial planning to employees to stimulate their financial awareness, actionability and peace of mind. This helps employees to stay positively focused on their role in the company. Several collective labor agreements actually stipulate employer funded financial plans every 5 years.
Making financial planning available for employees can be of significant value to the company. The degree of support per company varies. On one end, there are employer funded workshops aimed at creating financial awareness, and employees fund the financial plans themselves. At the other extreme, employers can fund the financial plans (in any case as part of the process of reorganizations which result in loss of jobs). There are also many instances in which employers provide support somewhere in between these two scenarios.
Despite company efforts to deliver the best, it is not always possible for the company to reap the returns. Companies experience opportunities and difficulties, requiring change in approach, process or in teams. An employee can still lose a job even if everything is done right. If there is no possibility to move into a different position it could end up with losing company employment.
Research has found that losing your professional occupation is one of the most severe mental blows to deal with. The first emotional aspects are comparable to mourning, immediately followed by financial uncertainty. The latter is exacerbated by the combination of the social security system, taxation and possible industry arrangements the employer belongs to, which is complicated for many.
Soft factors deal with hard issues
Employee wellbeing, happiness if you will, is a vital part of employer reputation. It takes tremendous investments and efforts to build and maintain and can be lost easily. Feeling financially secure can support employee commitment and employee performance, thus protecting investments in employee attraction and retention.
Have you started supporting financial planning for employees?