The pandemic is far from over, and employees need support from their organizations now to prepare for the next phase.
As COVID-19 cases surge in California, Texas, Florida, and Arizona, Americans are losing confidence in reopening plans and facing continued economic fallout. And with supplemental unemployment benefits on the line, business leaders must step up to ensure employees are prepared for future hurdles.
According to a recent survey from the National Endowment for Financial Education, 9 out of 10 Americans are experiencing financial stress due to the coronavirus crisis. But employers can help ease some of that worry, yielding more productive, engaged workers.
The “second wave”
For a time, it appeared the U.S. was making progress in flattening the curve. Daily new infections and deaths declined after strict lockdown measures, and most states began cautiously reopening in May. But gains in preventing the spread quickly reversed as more Americans began venturing out, interacting with each other, and loosening personal restrictions, like social distancing and wearing masks.
Consequently, according to Dr. Anthony Fauci, the country’s top infectious diseases expert, we’re still “knee-deep” in the first wave of the virus. Mostly, cases never dropped low enough for long enough to make it out of the first wave. So, it’s not that we’re looking at a second wave of the virus. Rather, a second wave of essential workers called to the frontlines, reinstated restrictions and economic turmoil as the surge forces many states to backtrack reopening plans.
With fall creeping closer, new classes of workers have been deemed essential. Whether virtually, in-person, or a mix of both, teachers will soon return to the classroom. And with every state currently in some reopening phase, service workers are returning to restaurants, hair salons, and brick and mortar shops. New roles like temperature checkers, health ambassadors, and contact tracers, have also been created to keep essential businesses safe.
But reinstated restrictions likely aren’t far off. According to Dr. Ali Khan, former director of the CDC’s public health preparedness office, without the necessary mix of increased testing, contact tracing, social distancing, and mask-wearing during the current surge, “your only option is to shut down.”
The confluence of these factors creates an environment of extreme economic instability — and workers are feeling the toll. Reopening states is necessary to improve the economy, but states will be forced to close again to deal with case surges without effective health measures in place. As a result, many workers have lost the ability to predict their next paycheck reliably.
Helping employees build financial stability
Jason Lee, CEO at DailyPay — the award-winning, gold standard on-demand platform offering comprehensive pay-experience solutions to world-class companies and their millions of employees, including Kroger, Adecco, and Berkshire Hathaway — says the key to preparing for the “second wave” of COVID-19 challenges is helping employees build financial stability now.
In a new survey of hourly workers jointly conducted by DailyPay and Funding our Future, 50% of respondents said they are either “finding it difficult to get by” or are “just getting by.” Another 40% reported they’re having difficulty paying bills each month.
“Americans feel like they have no control. Not only are we in the middle of what will likely be a long-lasting global pandemic, but the economic ups and downs have also left many unprepared and unable to make ends meet,” Lee says.
According to Lee, one of the only ways Americans can regain a sense of financial control is by building up their savings now. For many, this means accessing their pay on-demand to get out of a cycle of being behind on bills. Savings help ease financial stress on employees in the current economic environment — 57% of respondents with existing savings said they had to dip into their reserve due to economic strains caused by COVID-19 — and better prepare employees for an uncertain future that may involve business closures and layoffs.
“Unfortunately, many Americans feel unequipped to set aside savings when just getting by is the top priority,” Lee continued. “Caring about employee financial well-being, especially right now, is simply the right thing for business leaders to do. And the less stressed workers are about money, the more productive and engaged they are on the job.”
The same study showed that 62% of respondents said they would save more if there were a more natural way to set aside a portion of their paycheck. On-demand pay platforms can provide that relief by giving employees early access to earned income that can be used to pay bills and avoid late fees, leaving them with more money to allocate for savings at the end of the month. Additionally, some of these platforms have features that automatically set aside a portion of employees’ paychecks for savings at no cost.
As we continue to grapple with the effects of the first wave of COVID-19, a second wave feels distant. But another wave of financial challenges is just around the corner. Business leaders can help their employees prepare by empowering them to build savings now, mitigating significant financial worry.