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The Mortgage CrisisA Human Resources PerspectiveThe current mortgage crisis is a perfect example of a time when the answer to those questions is a resounding YES for almost every business. If you have employees and customers it is a virtual certainty you will be touched in some way. The key to weathering the storm is being aware and prepared. YPP is carefully monitoring the situation from a human resources perspective and has identified several mortgage crisis related issues that may impact our clients. Employee StressWhen employees are facing a financial crisis there is always stress, but add to that the potential loss of a home and the stress level rapidly escalates. Foreclosure rates are up throughout the country which is an alarming trend but each statistic represents individuals or families facing a serious crisis. When the issue comes into your workplace when an employee is about to lose their home it can have a ripple effect throughout your business.ProductivityIf even a small percentage of your workforce is impacted by the financial stress of a looming foreclosure it can result in lowered productivity for your entire company. Distracted employees may find it difficult to meet deadlines or to produce a quality work product. Even employees who are not directly impacted may be affected by coworkers, friends or family members caught in the mortgage crisis.AbsenteeismEmployees trying to cope with a serious financial crisis may find themselves so overwhelmed with their personal situation that they develop physical and psychological symptoms that prevent them from coming into work. In these competitive times employers seldom have “extra” employees so any increase in absenteeism will impact coworker morale and the company bottom line.Mental Health IssuesEmployees facing acute financial stress are more likely to suffer from depression, anxiety, alcohol and drug problems. When these issues are brought into the workplace employers may be overwhelmed by the complexities of the problems and distracted from important management tasks. |
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Risk of InjuryIf an employee suffers from a lack of sleep or just the loss of concentration due to increased financial stress it can be a safety risk not only to the employee also to coworkers.Customer Service ConcernsIn our competitive world you depend on your employees to provide the highest possible level of customer service. Employees coping with financial stress may find it difficult to project a positive company image or to meet customer expectations.401 (k) ImpactsEmployees may choose to turn to a 401 (k) loan as an emergency bailout. Although employees may be allowed, depending on a company’s plan, to borrow the lesser sum of either $50,000 or half of their 401 (k) balance employees need to understand the long term ramifications of raiding their retirement funds. In addition, plan sponsors may see an increase in employees requesting investment advice and reallocation of their funds.RelocationThere are two relocation issues employers should consider. First, you may find employees reluctant to relocate even for a better opportunity with your company. Faced with an uncertain housing market employees may choose to stay put rather than risk trying to sell their current home in a down market. On the other hand, employees forced out of the local housing market may opt to leave their jobs and move to an area with a lower cost of living. Either scenario can wreck havoc with your human capital investment.Salary Pressures & TurnoverEmployees facing foreclosure or a sudden increase in a house payment due to a variable rate increase will want to increase their income, either by getting a raise or changing jobs. In markets were there has been real imbalance between salary levels and housing costs that pressure may be even more acute. Employers need to evaluate their staffing needs and monitor salary trends in their industry to stay competitive.On a Brighter NoteMost labor markets have been very tight in recent years so an increased labor pool as a result of layoffs in the mortgage industry may be a bonus for some companies. If you have been planning to add new employees it may be a good opportunity to find newly available talent. If your company offers more competitive salaries you may be able to attract talent from competitors who have employees seeking to increase their income.Where to Go For HelpYPP clients have access to a full range of HR expertise. Our HR professionals can assist you in addressing employee issues and helping you find the resources you need for your specific situation. YPP will also be implementing an Employee Assistance Program as a component of our Health Insurance Plan starting in November. Employee assistance programs are an excellent resource to assist your employees with personal issues, freeing you to focus on running your business. Trade groups and associations are another good resource that can help your better understand the economic and personnel issues affecting your industry.
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