2020 has brought on no shortage of stress for both businesses and staff alike. With people being stood down or laid off, pressure on wages, it has been stressful for employees and business owners alike.
So what are other methods and incentives used to incentivise staff and keep up office morale during these unpredictable times (and how across are you with regards to your employees financial (and therefore mental state of mind))?
With regards to incentivising staff, generally speaking, there are two main types of incentives in the workplace being compensation incentives and recognition incentives (an easier and yet meaningful one to implement in this environment).
Compensation incentives includes items such as:
- profit sharing,
- signing bonus and
- stock options.
Recognition incentives (incorporating corporate culture can be vast and wide and include simple actions such as:
- praising employees,
- yoga and gym memberships,
- team lunches,
- cooking demonstrations,
- volunteer days,
- matching of donations, and
- extra day off
We’ve come across many of our employer partners who offer a lot of these recognition incentives during lockdown (more so Melbourne based businesses). Some of these incentives / activities have been a lot easier and cheaper to implement utilising Zoom.
It is understandable that businesses may not want to put any more financial pressure on themselves in these uncertain times, so it’s important to find ways to incentivise and reward your staff that do not add more pressure to the business.
At Charter Finance we have found that more businesses are incentivising their staff by helping their wages go further.
With wages at best stagnated and in many cases down, having mortgages professionally managed helps them with their financial health and wellness which in turn improves workplace productivity. Whilst not an incentive, these types of recommended services to employees addresses many core values of businesses in taking care of their employees interests.
Becoming financially independent is a goal most employees have and our role ensures that they are aware of what is in their control to maximise the growth in equity in their properties. The banks set borrowers on a repayment treadmill, but do not provide their clients with the tools & mechanisms to build their wealth through their property.
Having greater cash flow or an ability to be provided with tools to grow one’s wealth is important to both employer and employee alike.
In having regard to your employees financial and mental state, which above incentives and programmes address, it is very important to note that many of the large insurers (life, income and trauma) we deal with advise they are more concerned about long term trauma claims that will arise from the severe downturn that some industries are facing and other social side effects of this pandemic.
In PwC’s recent 9th annual Employee Financial Wellness Survey (US based survey) they found that employees are unprepared for an extended economic downturn or recession. Many employees are already in a fragile financial state and unprepared for short-term cash needs, lacking the ability to absorb even a minor shock. In fact, more than one-third of full-time employed Millennials, Gen Xers, and Baby Boomers, had less than $1,000 saved to deal with unexpected expenses.
It is therefore of no surprise to learn that ANZ Australia’s 2018 report found that active saving behaviour was a key influence on financial wellbeing. Adopting this behaviour improved financial wellbeing. The survey results illustrate the association between active saving and higher levels of financial wellbeing.
At Charter Finance, we have seen quite interesting swings from different households. Homes with families seem to be saving more with less discretionary spending, and those households with singles or couples, have actually had an average increase in discretionary spending, mainly from online shopping, in part due to boredom factor of being stuck at home.
It is therefore critical that employers are having open dialogues with their employees to monitor both mental and financial wellness.
Research from Workplace Super Specialists Australia (WSSA) finds that “employees who lack financial wellness tend to be more stressed, as observed by more than three in five employers (63.3%),”.
“Further, a significant number of employers also noted presenteeism (43.3%), low morale (30%), and absenteeism (16.7%) as other consequences of poor financial wellness.”
Running the well-known SMART acronym as part of our mapping programme whether we are dealing with refinancing employee home loans, or restructuring a C Suite’s property portfolio, having these Specific, Measurable, Achievable, Relevant and Timed goals is an effective way of having employees reach their financial goals.
In setting these goals, no matter whether it’s the CEO who is a high net worth investor, or an employee buying their first home, it’s important to have someone to be accountable to.
It also goes a long way knowing in times of uncertainty, that the company they work for is working to look after their best interests.
So, when incentivising your staff, if you are concerned about the company’s available cash flow and how to retain staff, think outside of the box. Consider what do your employees need? How can you help them? What will help them maximise their income and take pressure off them and their families.