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Extending a Helping Hand
Some organizations are offering emergency cash grants to workers having tough times making ends meet. While this is seemingly a win/win situation, it can create some dissention in the ranks. Companies need to make sure such plans and procedures are seen as fair.
The recession's most visible toll is on the 9.7 percent of Americans who now find themselves involuntarily unemployed. But economic hardship is also being experienced by many workers who have not received a pink slip, and some employers are attempting to ease their pain with cash assistance. The practice is not without controversy and pitfalls, however.
Several such organizations were spotlighted in the Families and Work Institute's recently published 2009 "guide to bold ideas for making work work," highlighting "new ideas" from the most recent crop of winners of the Alfred P. Sloan Awards for Business Excellence in Workplace Flexibility. Among those cited: * Cooper Roberts Simonsen Associates, a Salt Lake City architectural firm, whose "We Care Fund," financed by voluntary payroll deductions, helps employees cope with financial emergencies; * 1-800-CONTACTS, Inc., a contact-lens supplier also based in Salt Lake City, offers one-time grants to employees in crisis; and * Bon Secours Richmond Health System, a central Virginia hospital system that gives up to $1,000 to employees via its employee-assistance program, as part of a broader economic support initiative. Bon Secours, which has about 7,000 employees in the Richmond area and another 4,000 in Hampton Rhoads, Va., budgeted $180,000 for the cash assistance program for the fiscal year that began in September -- a 20 percent jump from last year, according to Dawn Malone, administrative director for Bon Secours' work and family services programs. The cash is available to employees who "find themselves faced with a crisis and don't have funds to take care of it -- funeral expenses for a family member, their car breaks down, whatever it may be," Malone says. But the program is more than a mere corporate ATM. Because it's administered through Bon Secours' EAP, employees often are steered toward additional community resources, both educational and financial, Malone says. In addition, Bon Secours prides itself in empowering lower-wage staff to advance their careers (and thus their financial resiliency) through a variety of other initiatives.
Financial-assistance programs like that of Bon Secours are not "new" per se. "Some companies have always had emergency funds," says the New York-based Work and Families Institute's Ellen Galinsky, who created the Sloan Awards project. The most recent Sloan Award questionnaire asked employers "what they're doing in the recession to help employees," Galinsky says. Richard Federico, a Trumbull, Conn.-based HR consultant specializing in "best places to work" matters, believes some of these programs have antecedents in "lifecycle" benefit programs featuring cash assistance for various personal purposes, which date back to the 1980s. "What's sparking a lot of the employer interest [today] is that it's one of the questions that gets asked in 'best places to work' applications." The Fortune magazine survey, he notes, recently has given more prominence to the question of ways employers "assist employees in time of need." But, Frederico says, "I don't think it's a PR stunt. Some of these programs are the result of employee suggestions, and a lot of employees want to know how they can help fellow employees," he adds. Some cash-assistance programs are funded by voluntary employee payroll deductions, or special fund-raising events, he says. But that doesn't inoculate emergency cash-grant programs from criticism or cynicism. A recent blog post by Wall Street Journal columnist Sue Shellenbarger highlighting the cash-grant programs listed in the Families and Work Institute's report prompted concerns from readers about practical issues and questions of equity. In theory, such programs would, over time, help reduce employee turnover, but several readers expressed skepticism on that score. "I'd rather have good health insurance than a handout," one wrote. "It's a nice paternalistic thing, but seems fraught with potential problems," asserted another. "I think a fair day's pay for a fair day's work is the best axiom." One of the "potential problems" cited by that commenter was potential "charges of discrimination, if not legally, than among the employee base, a la 'why can't I just have more pay?' " Another reader raised the specter of bailouts for profligate employees unprepared for large, but unexpected, essential expenditures, "versus the frugal employee who budgets and has enough money for a rainy day." But Federico points out that many popular benefit programs could also be criticized on equity grounds. He cites adoption assistance, dependent-care spending accounts and tuition-reimbursement programs, as examples. "Companies have always had to address the issue of equity," adds Galinsky. "Sophisticated companies would always think about putting in place procedures that are seen as fair." The formula at Bon Secours seems to work; Malone says she has never heard any grousing about the emergency-assistance program. One reason may be that "it's available to anyone who is in a crisis situation," she says. Thus, one employee's cash grant would not be perceived as coming at the expense of another. And because the program is administered confidentially through the organization's EAP, line managers are not placed in the awkward position of having to judge the worthiness of an employee's request. Indeed, supervisors may have no knowledge of whether an employee is receiving such support. A committee composed of top managers from Bon Secours wellness, EAP and HR departments oversees the overall operation of the emergency program, Malone says. But even the companies that provide emergency-cash assistance recognize that many employees need more than a one-shot cash infusion to stay on their feet over the long haul. "There's a lot of talk now about how to help employees manage their finances," Galinsky says. At Bon Secours, for example, employees who come to the EAP in a financial crisis receive counseling on financial management. "It's not just, 'Here's $1,000 to pay your credit-card bill,'" Malone says. The Sloan Awards winners also included several employers with strong financial literacy and financial management programs, Galinsky says.
September 17, 2009 Copyright 2009© LRP Publications |
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