The CIPP’s policy and research team present and comment on recent research results of what employers do to help their employees financially in December and January
Much emphasis has been placed on the notion of financial wellbeing and helping individuals who following the devastating outbreak of Covid-19 may be struggling with money worries this year.
January is a notoriously difficult month for a lot of people because, although Christmas and the festive season is a magical time for most, the period can also be expensive. This, combined with the fact that January is a long month, filled with short days and long nights, and the fact that employers may have brought forward their December pay date, can leave many employees feeling depressed and concerned about the state of their finances. So, what steps can be put into place to prevent it from happening in the future?
To gauge whether businesses are doing anything to help staff at this time of year, the CIPP’s policy and research team posted a Quick Poll in the CIPP’s News Online pages. We asked the question: “As January is a long month, due to most businesses offering an earlier pay date in December, what do you do to assist employees?”.
The responses varied, and it appears that the majority of companies don’t do anything to assist employees in the month of January, which accounted for 52% of responses. However, some 40% of respondents stated that they maintain the regular pay date in December, so the length of time between the December and January pay dates is not increased. December bonuses are provided by 4% of employers, 2% offer advances to help over the winter months, 1% confirmed that they provide financial education to help employees to budget effectively, with a further 1% providing a Christmas savings scheme.
One member confirmed that their employer actually brings forward the January pay day slightly shortening the time since the previous payment. As February is a short month, this eases the pain for many very effectively.
Businesses do not necessarily need to offer support to staff that costs them money but can divert employees to the wide range of impartial free advice that is available. The Money Advice Service (thtp://ow.ly/yvsk30rhn6b) is one such provider of guidance of this nature.
Often, the issue is that those who find themselves in debt cannot always see a way out of the perpetual cycle, but these organisations are there to help by establishing tailor-made advice plans to suit individuals and their differing circumstances.
Something as simple as using payslips, for example, to signpost employees to these organisations and their contact details could really help staff during the period following the Christmas break.
This links to the 2% of respondents who confirm that they provide employees with advances. Though beneficial in theory, it must be remembered that employees have to repay that advance through the following payrun, which will inevitably leave them with a lower net pay figure in their standard January pay packet. Again, the advance does not remove the issue of financial hardship but simply seeks to delay it in certain circumstances. For many, however, it does work effectively, reducing stress levels over the festive period and having no substantial domino effect in the following months.
Maintaining the December pay date
It was surprising to see how many responses to the Quick Poll confirmed that businesses make no change to the December pay date; however, this seems to stem from the fact that many employees who were once weekly paid are now paid on a monthly basis. It is common practice for many businesses to bring forward the pay date in December, so that employees have some extra cash in their pocket ahead of the big day, for purchasing gifts and for socialising. The fact that many companies refrain from delivering the December pay day earlier does not seem to be a bad move, as it means that the period between the December pay date and the January pay date is not extended.
Many employers produce a list of pay dates for the year and distribute it to all staff. This is to help payroll communicate the essential deadlines for submitting data that will impact pay each month to the wider business areas, and also means that employees can plan ahead. This may be instrumental in supporting staff financially where the pay date in December is not maintained, and is shifted forward, as preparation is essential in healthy budgeting.
A final thought
Although it is recognised that January is potentially a tough month for employees, it is also important to consider the effect the pandemic may have had on a much larger group of people, and to a more detrimental extent this year.
Employers, where they are in a position to do so, should seek to ensure that they act in whatever ways possible to help to support their staff, and to help them following on from all the economic turbulence encountered in 2020.