Changing Environment: Altering Employer Obligations For Remote Workers

Kelly Anonson is the Chief Distribution Officer for Recoop Disaster Insurance.

In 2022, the U.S. tied 2017 and 2011 for delivering the third highest number of billion-dollar disasters and was the third highest year in total costs, with a price tag of at least $165 billion. Beyond the sticker-shock is the widespread nature of these disasters. Between January 2013 and January 2023, 88.5% of all U.S. counties declared a natural disaster, including 95% of the 200 most populated counties, according to Forbes Advisor. When it comes to natural disasters, there is no hiding.

The financial burden these destructive forces create also presents a level of instability few households can afford. According to the Federal Reserve’s 2022 Economic Well-Being of U.S. Households survey, nearly 4 in 10 Americans lack enough money to cover a $400 emergency expense. Limited access to flexible funds is an issue when families are faced with the steep costs of home and renters’ insurance deductibles or the surprises that come with damage from severe weather.

These stressors are only compounded when we consider the lasting impact of the work-from-wherever evolution. The Bureau of Labor Statistics reports that around 27% of the U.S. workforce is working remotely at least part of the time, with several academic surveys suggesting that figure is closer to 50%. A natural disaster impacting an employee’s home office, when that is their primary workplace, is a new added risk for workers and employers.

A 2022 Betterment at Work survey showed that more than two-thirds (71%) of workers say their finances cause them anxiety and 68% say financial wellness benefits are more important to them now than they were a year ago. It’s why organizations today are starting to offer new financial wellness benefits like access to emergency funds and financial planning services to safeguard employees from financial stress either as optional or employer-paid benefits.

Disaster insurance solutions are a growing area where employers can have impact, as most natural disasters are not covered by standard homeowner and renters’ policies. This type of coverage often comes with pricey premiums and steep deductibles, or isn’t available at all, which makes it a dynamic area for employers to support their workforce, especially those who often use their home as their workplace. Having access to this type of coverage can help employees recover more quickly from a natural disaster with the ability to tap into funds designed to protect their financial well-being from severe weather.

Before diving into new disaster insurance benefits programming, start by asking your leaders and your employees to learn what benefits they value most and what types of benefits they desire. Identify flexible solutions that allow your employees to select good, better and the best options that work for their lifestyle, their finances and their local natural disaster risks. Also, conduct an honest evaluation of the number of employees regularly spending two or more days working from home to assess your productivity risk.

A current customer of ours was adapting its benefits programming to focus on helping its employees live the highest quality of life and build offerings that would be a differentiator in the marketplace to attract new and retain existing employees. Like most companies, they have a business resiliency plan, but they’ve had an increase in remote employees over the past few years and have become more concerned about how to get employees back to work and on their feet in the event that they live in an area affected by a disaster.

They wanted to be able to give these employees quick access to cash they may not otherwise have to enable them to navigate the effects of a disaster more quickly and with less disruption. They also wanted to show that they were truly embracing their growing remote workforce, who often feel left out because they are not in the office daily. This expanded benefit provided a feeling of belonging and a sense that the company is invested in them when times get tough.

Their experience illustrates that top talent have options for where they work and how they work, making it all the more critical for employers to evolve their benefits strategy to address the realities that cross the boundaries of the home and the workplace. The environment is shifting—quite literally—and homeowners have a steep financial burden to manage in the wake of natural disasters on the home front, which also has implications on their ability to maintain workplace productivity.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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