The state of employee’s home lives can greatly determine the level of stress they’re experiencing; for those paying for their children’s college tuitions, who are high-risk or are taking care of high-risk parents or loved ones, or facing unexpected medical bills (covid-related or otherwise), the prospect of layoffs, furloughs, or reduced work hours can send a particularly chill down their spine.
No one has been left untouched by the wide-ranging effects of the coronavirus pandemic, and the financial consequences in particular have been devastating. As covid cases climb, and in some places outpace the previous single-day highs set earlier this year, state and local governments consider more stringent measures including limiting business hours, moving back to previous stages of partial restrictions for certain types of businesses, and even full lockdowns. While these may be some of the most necessary measures to stop the spread of this deadly virus, without a second stimulus plan (and for many Americans, even with it, should one materialize) and with layoffs looming once more, millions of people are left in another wave of financial insecurity, often without having been able to recover from the first.
While everyone has some sort of pandemic story, from lighthearted tales of playing dozens of hours of “Animal Crossing” and joining the sourdough phenomenon, to the sobering realities of healthcare worker’s experiences and the tragic loss of family members and friends, it’s clear that COVID-19 hasn’t hit everyone equally. This is true too of exposure rates and the immediate and long-ranging financial effects. The numbers show that certain demographics, like members of the Black, Indigenous, and Latinx communities, are more likely to contract the virus and also have higher mortality rates. Employees' difference in racial and socioeconomic background could not only mean that some are more likely to be exposed, but may also be driving a stronger response to the pandemic emotionally and economically. The reasons behind this are manifold; first, people of color are more likely to live in tightly-packed urban areas and work in high-risk environments, and second, minorities have higher rates of chronic health conditions that put them in high-risk pools.
Facing higher risk factors and the potential for expensive medical bills and/or life-threatening exposure, some demographics have more reason for concern than others, though the intersection of race and socioeconomic class cannot be ignored either. The state of employee’s home lives can greatly determine the level of stress they’re experiencing; for those paying for their children’s college tuitions, who are high-risk or are taking care of high-risk parents or loved ones, or facing unexpected medical bills (covid-related or otherwise), the prospect of layoffs, furloughs, or reduced work hours can send a particularly chill down their spine.
According to the APA, signs of financial stress include:
To add to this, thinking or worrying about money constantly is another possible symptom, one likely manifesting with increasing frequency these days. Looking at the numbers, of those surveyed by John Hancock, 58% more people are financially stressed now than they were pre-covid, and 79% are worried about “the current economic conditions,” 73% are worried about retirement savings, and 22% have already drawn from their emergency savings. While these numbers certainly seem daunting, fret not; the survey also asked participants about the desired response they’d like to see from employers. 86% believe financial wellness plans are important, while 69% say they reduce financial stress, 62% would like help from their employer to assess their financial wellness, and 59% say such programs actually increase company loyalty.
Employers can, of course, refer employees to their Employee Assistance Programs for financial counseling and work with retirement plan providers to make retirement resources accessible, available, and easy to understand. Business Wire suggests a few concrete actions employers can take to help mitigate the covid-induced financial stress experienced by employees by providing access to financial professionals, such as advisors and planners, expanding 401(k) automatic features like auto-enrollment, offering all-inclusive financial coaching and advice as a benefit available to employees and/or retirees, and establishing emergency savings accounts for employees, and even the American Psychological Association (APA) has published information on this topic, for those more comfortable with such an approach.
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
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