DRIVING EMPLOYEE ENGAGEMENT IN AN AGE OF FINANCIAL UNCERTAINTY

Most employers may not consider feelings in the workplace.

While we intuitively understand that happy employees stay in their jobs longer, reduce recruiting costs, have lower absenteeism, and improve client retention, approaching employee engagement during challenging financial times, can be difficult to address effectively. To empathize with and understand the potential mindset of the workforce, let’s look no further than recent history: The COVID-19 pandemic. There are many lagging consequences still being experienced from this tragic event. When it comes to the American worker, several realities come to the fore.

The Federal Funds rate increased from 0% to over 5% from the start of 2022 to the end of July 2023, and events such as the three strikes by Kaiser, the Writers Guild of America, and United Auto Workers demonstrate, in part, that consumers are being put under more financial pressure. Moreover, federal student loan payments have resumed for roughly 12% of the US population (over 43 million Americans) who also hold a staggering $1.7 trillion in debt.

Even though in 2024 we are seeing positive indications that the market is continuing to recover from the massive COVID-related job losses with employers adding 2.7 million jobs in 2023, or an average monthly gain of 225,000 jobs, the workforce is still under much strain.

The 2023 Retirement Readiness Annual Report by Betterment found:

• The top three financial stressors employees faced were inflation, credit card debt, and the cost of housing.
• 58% had feelings of anxiety around their finances making it difficult to focus or do their best at work.
• 69% of Gen Z reported being two times as affected by financial anxiety at work as Boomers (36%).

All of these challenges can reduce productivity, and have a direct negative impact on business profitability. And with the move to more virtual work environments, building culture and demonstrating that employees matter has gotten harder.

So, what is an employer to do?

Here are seven suggestions to increase employee engagement and build morale at your firm in an age of financial uncertainty:

1. 1. Beyond offering a strong retirement and benefits package, survey your employees. Feeling heard and understood can go a long way toward soothing certain anxieties. Inquire about how employees feel about work, their stress levels, and how they are managing work-life balance. Share the findings with employees and most importantly, take action based on survey results.
   2. Connect employees to outcomes. Be transparent about the company’s mission and purpose and ideally, when possible, connect employees’ work to that mission. Be clear about your organization’s financial condition. Do your employees know the direct impact they have on goals and objectives? Create the correlation between desired outcomes and their role. Feeling like an important member of the team can give great comfort when one may be feeling otherwise exposed or expendable, while under financial worry. Also, on this note, let employees know they are encouraged to engage with their manager or human resources department if they need to discuss a work-related or financial matter. Listening is powerful.
   3. Demonstrate caring by making wellness programs available. Any type of wellness program, health or financial, can be made even more powerful if the offering can be tied to employee survey feedback. Whether it is offering counseling, stress management, nutrition and fitness, or financial planning resources, strive to make a meaningful difference.
   4. Recognize people. Shine a spotlight on your employees for the work they are doing and when possible, add appropriate rewards. Gallup and Workhuman research found that strategic employee recognition (recognition that is fulfilling, authentic, equitable, embedded in company culture, and personalized to the individual) can pay dividends, by which a 10,000-person organization with an already engaged workforce can save up to $16.1 million annually due to reduced employee turnover.
   5. Say thank you. Harvard Business School Associate Professor Francesca Gino explored, among many topics, the science of gratitude in her book, Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan. In two of the gratitude experiments, Gino asked 57 students to give feedback to a fictitious student, Eric, regarding his sloppy cover letter for a job. Half were emailed an abrupt confirmation that read, “I received your feedback on my cover letter.” The other half received gratitude that read: “I received your feedback on my cover letter. Thank you so much! I am really grateful.” When Gino measured the students’ sense of self-worth afterward, 25% of the group that received just an acknowledgment felt higher levels of self-worth, compared with 55% of the group that received thanks.
   6. Provide clarity about growth opportunities. One way for employees to lessen the financial burdens placed on them is to make more money. Rather than getting a second job to make ends meet, they may love an opportunity to grow within your organization. Are your employees aware of your bonus structure and your process for job promotions? Employees who feel valued are more likely to be and stay engaged. If your firm is not in the position to offer rewards by way of money, offering peer-to-peer mentorship opportunities, training programs, or other leadership development resources (or even books) can go a long way.
   7. Showcase your employee support. In addition to the ideas offered in this article, tell your employees how you are supporting them. Communicate with them often and prove your value as an employer by always touting your employee support programs and offerings.

Financial hardship may affect us all at one point or another in our careers. Empathy, compassion, and thoughtful action are important to maintain a healthy work environment. Economic uncertainty, political strife, and tenuous world events can make employees uneasy and fearful. Employers can do a great service to employees and their bottom line by listening to employee feedback, staying transparent about company goals and their role in success, and showing recognition coupled with rewards.