08 September 2020

One in two businesses failing their staff during COVID

Employers are urged to protect employee wellbeing as Australia's economic crisis deepens. More than half of the country's 12 million workers received no support from their employer during the first wave of the coronavirus pandemic, despite having to adjust to major changes in their workplace, new research reveals.

That number jumps to 72% for people who lost their jobs during COVID-19, according to a national study by the Employee Benefits and HR Consulting division of Gallagher.

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The Gallagher COVID-19 Employee Wellbeing Study, conducted in July, shows nearly three quarters of all employees faced workplace disruption as a result of the coronavirus pandemic, in the form of redundancies, stand downs, forced annual leave, reduced working hours and cuts to wages and salaries.

Yet the level of employer support didn’t keep pace. Only a quarter of staff said they were offered flexible working hours, one in five said they received counselling or mental health support, 11% said they could access flexible annual leave and only 4% were offered financial guidance or advice. 

The research also showed more than one third (36%) of Australians feel worse about their financial situation than they did six months ago and one in four people (23%) are struggling financially.

Gallagher Employee Benefits CEO Graham Campbell says workers were bearing the brunt of the COVID recession and that some employers were failing their staff.

“The last six months have put enormous pressure on businesses and workers as they have had to adapt to swift economic shutdowns, yet some employers seem to have forgotten how to look after their most important asset – their people,” he says.

“This could have enormous implications for staff retention when the labour market picks up and businesses who dropped the ball find themselves with teams of resentful staff.

“Employers who look after the emotional and financial wellbeing of their people now will be the ones who thrive as the economy recovers,” he said.

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The study of people with a job and those who lost their jobs during COVID-19 showed that one in five workers did not feel supported by their employer, and 34 per cent rated their employer’s level of support as average.

Only one in 10 people said their employer was exceeding expectations with how they were supporting staff during the COVID crisis.

Figures released by the Australian Bureau of Statistics (ABS) showed total payroll jobs at the end of June were 5.7% below mid-March when Australia recorded its 100th COVID-19 case and remain between 4 and 5% below mid-March levels.

The latest economic figures show that Australia is officially in its first recession in almost three decades, with the June quarter GDP numbers showing the economy went backwards by 7%.

“While our research shows workers retain a mostly positive outlook, we still haven’t hit the bottom of the economic crisis,” Campbell says.

“Employers will need to step up as the recession takes a further toll on Australians’ personal and financial wellbeing.”

Employer support directly affects employee wellbeing

The Gallagher research showed that 39% of Australians say how their employer supports them directly affects their overall wellbeing, yet 36% say it’s the wrong kind of support.

Women are more likely to feel their sense of wellbeing has worsened as a result of their employer’s behaviour (24% compared to 18% of men).

Victorians are the most affected by their employer’s actions: 46% say their overall wellbeing is affected by their employer’s behaviour, and 39 per cent say their financial wellbeing is impacted.

Overall, Australians say the three most important workplace benefits to them are

  • flexible working hours
  • flexible annual leave, and
  • flexible salary payments.

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“The next six months will be critical for employers who are under short-term pressure to cut costs, but who will need to retain their core workforce on the long road to financial recovery,”  Campbell says.

“But employers be warned – tokenistic gestures will backfire. A gift hamper may show you care but won’t help people who are in financial distress. If you’re genuinely interested in promoting employee wellbeing, you need to provide the kind of support your people need and value.

“By providing a benefit that helps reduce financial stress, employers can positively influence the wellbeing of their staff,” he says.

Research key findings

    1. More than one third (36%) of Australians feel worse about their financial situation than six months ago, with more women (39%) than men (34%) feeling this way.
    2. The top three causes of financial stress across the country are day-to-day living expenses, level of savings and unexpected costs – all indicators of whether someone can maintain their lifestyle throughout COVID-19.
    3. 51% of people said their employer provided no support at all in the last six months, despite major changes to their workplace, including redundancies and reduced working hours.
    4. One in five Australians said they are “struggling” financially.
    5. Despite almost half of Aussies working reduced hours, more than one in four people (26%) are working harder.
    6. One in five people do not feel supported by their employer, and 34% rated their employer’s level of support during COVID as average.
    7. Only one in 10 (12 per cent) feel their employers are ‘exceeding expectations’ by supporting their staff.
    8. While Australians are suffering from underlying financial stress, an overwhelming 92% have a positive outlook on their personal financial situation.
    9. 39% of people say their employer’s level of support impacts their overall sense of wellbeing, yet 36% say it is not the kind of support that matters to them
    10. The three most important workplace benefits to Australians are flexible working hours, flexible annual leave and flexible salary payments.

Gender

  • One in four women (24%) and one in five men (19%) say financial stress is affecting their health.
  • More than three quarters of women (76%) rate flexible working hours as their top workplace benefit compared to 67% of men, while men are more likely to rate flexible salary payments as a higher priority (39% of men compared to 35% of women).

State-based findings

NSW/ACT

  • NSW is the ‘stressed state’: New South Wales suffers from the highest levels of ‘extreme stress’ across the spectrum of personal financial markers, along with the ACT — even though it has a high rate of secure government employment.
  • Nearly half (48%) of NSW/ACT workers say their employer supports them at work— yet 37% say it is not the kind of support that matters to them.

Qld/NT

  • Queensland and Northern Territory ‘slash and burn’: workers in these states had the highest cuts to hours and wages in the country, with more than half of Queenslanders reporting working leaner hours.

Vic

  • Victoria promotes ‘status quo’: Despite being hardest hit by COVID-19*, Victorian workers experienced the fewest jobs cuts during the first wave of the pandemic— 4% under the national average— and made fewer cuts to wages and working hours than any other state.

    *Note the study was conducted between 27—31 July, and therefore does not capture the views of Victorian workers during the Stage 4 restrictions, which came into effect 2 August.

WA/SA/Tas

  • The ‘wine and whisky’ states made more people redundant: South Australia, Western Australia and Tasmania were least affected by the COVID-19 health crisis, but they suffered more redundancies than the rest of the country, and are working harder with the resources they do have.
  • You are more likely to feel your employer mismanaged their response to the pandemic the further north you live: overall, the ‘wine and whisky’ states (WA/SA/Tas) feel employers have handled the pandemic better than expected, while more Queenslanders and Territorians feel employers handled it worse than expected.
  • Still, these states are the least financially stressed in the country, with the lowest levels of extreme stress across the spectrum of personal financial markers.

For help or information about your team's wellbeing speak to the Gallagher Benefits & HR Consulting team.


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