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How Did the COVID-19 Pandemic Impact Employee Benefits?

The COVID-19 pandemic’s impact on businesses made for a heck of a year (or 10 years . . . at least, that’s what it felt like). Both businesses and employees felt the weight of the lockdowns, isolation and lost revenue. But that’s not news to you—it’s the reality many business and HR leaders (maybe even you) are still living in and having nightmares about.

But the most important thing to do during hard times—besides getting through them—is to learn from them. And there was a lot to learn from the pandemic. For many companies, the way they do business has changed forever.

The Impact of COVID-19

Businesses of all sizes across the country had to lay off or furlough their employees. And some had to close their doors for good. But we wanted to know exactly how the pandemic affected businesses and their approach to employee benefits. Why? Because benefits are the best way for businesses to support their employees as things start to return to normal.

money bills

Is employee financial stress hurting your business? Hint: Yes it is. Learn how to fix it.

So for our 2021 Financial Wellness Benefits Study, we surveyed more than 1,000 business leaders in many different companies across the U.S. to take a look at some of the challenges and consequences they and their employees dealt with—and still deal with today. What we found was unsettling, to put it mildly.

Revenue was the most powerful way to show how successful a business was during the pandemic. And when we asked these business leaders how things went, it wasn’t good. It wasn’t even okay. Four in 10 (that’s 40%!) said they lost revenue in 2020.

Decline in Revenue in 2020

But lost revenue doesn’t even begin to tell the whole story. For employees, the battle took a more personal toll. Out of the leaders we talked to, 77% said their employees’ mental health took a hit, 75% said day-to-day business operations suffered, and 68% said employee financial health suffered. Those are huge problems.

Mental Health, Business Operations and Employee Mental Health took a hit in 2020

But there is good news about employee financial health. Those same leaders said the pandemic highlighted employee financial distress and raised the priority for financial wellness. Now, there’s hope that employers will start offering their teams some life-changing benefits like financial wellness.

Pandemic Highlighted Employee Financial Distress and Raised the Priority for Financial Wellness

Increased Priority for Financial Wellness

What Should Business Leaders Do Now?

The pandemic proved that American businesses and their employees weren’t ready for a rainy day, let alone something this life-altering. But despite the cost of COVID-19, there’s a light at the end of the tunnel—recovery. And a crucial part of companies fully recovering from the pandemic year is that their employees recover from it too. That’s where financial wellness benefits come in. Armed with the right financial tools and resources, employees and businesses can be ready for the unexpected and have hope for the future. 

Want to learn more about financial wellness? Check out The 2021 SmartDollar Financial Wellness Benefits Study!

 

An image of The 2021 SmartDollar Financial Wellness Study on a phone screen and computer screen with a button to click to read the full study.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.