The Financial Fallout of COVID-19 and Its Toll on Americans

On March 30, my husband lost his job due to coronavirus. If I’m honest, it wasn’t entirely unexpected. We anticipated this due to the nature of his work. But when you live in Southern California, own a home, and have children, with plenty of bills and other household expenses to be paid, you hope to avoid this very situation. 

When the call finally came, we held our collective breath, then grieved a bit. I took the afternoon off just so I could process the news and understand the ramifications for our family. And then my husband and I sat down and examined our finances, determining how long we could make our savings last. 

These days, our situation is far from unique. The only exception is that we had some savings to tap into, and only one of us lost a job. But like the rest of the country, we’re waiting and watching to see how grave the economic fallout of this pandemic will be for fellow Americans. Right now, the U.S. unemployment rate is the highest it’s been since the Great Depression, with minorities and women expected to be hit the hardest.¹

Half of all Americans polled in a recent MetLife study agree that financial health is a top concern stemming from the pandemic.² This statistic alone is all the more reason why organizations should re-examine their financial wellness benefits and make sure their people know about them. 

But there’s a big difference in communicating about financial wellness benefits before the pandemic and now, as the picture of financial wellness in America has drastically changed.

Financial Wellness Isn’t ‘Finances as Usual’

Even before the coronavirus outbreak, the majority of Americans had little to no savings and were living paycheck to paycheck. And when you have almost no savings, you’re likely living in debt, living beyond your means, and not thinking about—or able to achieve—goals such as building emergency savings and socking away money for retirement. 

And now, as the number of unemployment claims continues to climb, so do mortgage forbearance requests. Those who don’t own a home can’t pay their rent. Millions are estimated to have lost their employer-sponsored health insurance because of a job loss. 

To be financially well during this time isn’t “finances as usual.” Even if your organization hasn’t laid off employees or made payroll cuts, the pandemic has still impacted your business or benefits fund—and your people may be dealing with hardships at home, too. Now more than ever, organizations need to recognize that “employer financial wellness programs should be covering the basics of what to do in an emergency and encouraging people to create an emergency savings fund.”

How to Help Your People Right Now

Organizations are primed to make a big impact in times like these by reminding everyone about all the financial wellness benefits they offer. 

Your people need to know what resources are available to them—for free—and that those resources are both trustworthy and unbiased, so they can make the best decisions for their situations. And because of all the financial stress they may be under, they need to hear from you frequently, so communicate often. 

In addition, your people need easy access to their benefits and help from financial pros when they experience a job loss, a major health expense, or anything else that affects how they weather the economic impact of the COVID-19 pandemic. Here are a few ways to help your people now:

Lower their financial anxiety.³ I won’t sugarcoat it: Right now, financial anxiety is at an all-time high. Let your people know if you offer access to a financial expert or how they can connect with one. They’re not money experts, so having free access to one can help them navigate this scary time. 

Remind your people about benefits they need or don’t know they have. Student loan payback programs, yearly reimbursement programs, financial and retirement planning—chances are you offer some or all of these (and hopefully more!). But are you telling your people about them? And are you communicating about them now? Because now is when they need them. For many, these benefits reassure them that they will be okay and make it through this difficult time. And don’t forget to address the big issues, too. This includes communication about their 401(k) savings, which has probably taken a hit. Remind folks that their 401(k) is a long-term strategy when it comes to retirement planning. 

Acknowledge their stress. When people can’t pay their mortgages, car payments, or emergency medical bills, it causes a huge amount of stress in their lives. And that stress can take a toll on their health and overall well-being. If you offer an Employee Assistance Program, tell them about it. Remind them that this is a benefit they can use, and that it’s completely confidential—and free. EAPs can help people deal with financial stress by allowing them to talk through their situations with a professional. But if your people don’t know about it or don’t remember that this program is available, it won’t help them. Assume that in times like these, it’s best to overcommunicate about programs that they may really need right now. 

Give your people flexibility, and be patient with their situations. The same week my husband lost his job, my children’s school announced it was closing. Fortunately, my manager and everyone on my team was extremely flexible with my work hours because they knew so much was on my plate. At the same time, our leadership was transparent and honest about business realities. I felt relieved and assured about my job, my team, and the company overall. I also felt incredibly grateful and proud to be part of an organization that truly cared about its people. I was given a moment to breathe and deal with our loss of income, children now at home, and just the impact of all this change in our lives. And I’m not alone in this. Many Americans experienced this same situation, maybe even some in your organization. For many of us, this won’t be solved in days or even months. So be patient with your people right now, and know that, like me, when they need you to be flexible with their schedules, it’s for good reason. 

Right now, your people are looking to you for guidance to weather this storm—because their financial wellness truly does matter.