3 Key HR Lessons from the Government Shutdown

Before we get into this column, let me start with the disclaimer that this is not a piece about politics or governing styles or anything at all to do with what people seem to like to argue about. I don’t care about any of that. What I do care about, besides my beloved New York Knicks, is the world of work. I enjoy reading the Bureau of Labor Statistics’ JOLTS report. I am fascinated by large retailers that somehow manage to hire tens of thousands of workers each holiday season. And I am endlessly intrigued by the continual development and evolution of tools and technologies to make work better.

With that out of the way, I want to talk about a few of the HR implications of one of the most widely reported news stories in the last few years: the recent partial government shutdown that caused about 800,000 federal employees to be temporarily furloughed or to work without pay for about 35 days–just over two standard payroll periods.

From an HR and workplace viewpoint, there are plenty of elements of this story that deserve a deeper examination: the notion of labeling some workers “essential” and others “nonessential”; the seeming unfairness of forcing employees to work without pay; or how a very small number of employees were able to effectively halt air travel in much of the Northeast. While these may be interesting angles, what I want to focus on here is how the issue of employee financial wellness came to the forefront, as we heard countless stories from federal employees who endured–and are still enduring serious financial hardships from missing two paychecks.

Employees’ Financial Wellness is a Real Issue

If there was one aspect of the shutdown that resonated for me, as a follower of HR and workplace issues, it was the sheer volume of personal stories of financial hardship that were shared by both furloughed and unpaid federal workers. Most of us can probably relate to relying on the next paycheck being on time in order to pay the bills, keep a roof over our heads and put food on the table. But the number of financial-hardship stories that emerged from the recent shutdown was staggering. There’s a lot of data on this topic, but I will just cite one recent (pre-shutdown) CareerBuilder study that reported that 78 percent of U.S. workers live paycheck to paycheck in order to make ends meet, and a further 71 percent of workers said they were in debt.

The takeaway for HR leaders is pretty simple from my perspective: If you are not at least talking about employee financial wellness in your organization, then you are probably not doing a complete or full job of considering the needs and circumstances of your workforce. Chances are, almost three out of four of your employees are closer to financial troubles than any of us would like to admit.

HR Must Be in the Employee “Success” Business

With my focus on organizing the HR Technology Conference around a central theme– “success with HR technology”–I keep coming back to the concept of employee (and organizational) success and HR’s role in it. The shutdown has reminded me that employee success is much more complex that we often think. Traditional HR approaches to ensuring (or at least attempting to ensure) employees can succeed in their roles have centered on aligning employee skills with job requirements, providing the appropriate learning and development opportunities to help employees grow and, in more recent years, working to create a positive culture at the organization that can indirectly support success.

But the impact of employee financial hardship–made so public by the volume of workers who were impacted and the 24/7 news coverage–must raise the issue of employee financial wellness much higher on the priority list for HR leaders.

With data from studies like CareerBuilder’s and the visceral nature of seeing federal workers talking on TV about having to visit food pantries or make decisions about whether to pay for groceries or medicine, this topic is now in the mainstream and one with which HR leaders in all industries must reckon. No employee can truly succeed if they are constantly facing financial pressure and stress. This kind of stress never “turns off” and affects everything about their lives–both inside and outside of work.

Technology Can’t Solve Every Problem, But It Can Help

Even if the shutdown seemed to finally bring these issues to the forefront, there has actually been more conversation about employee financial wellness in recent years. And when HR and people leaders are talking about something, you can be sure that HR-technology providers will either respond and/or emerge to try and help HR leaders solve (or at least address) these challenges supported by technology.

There are quite a few HR-tech start-ups that are tackling employee financial wellness and hoping more employers will make these technologies and programs more available to employees. One in particular, Best Money Moves, was recognized a couple of years ago at HR Tech for its innovative solutions. And larger, more established providers like Mercer and Prudential are beefing up both the tools and support for financial-wellness programs that they offer employers often as a part of a larger wellbeing initiative. In short, there are now more and more capable technologies both from start-ups and more well-known providers that can help HR leaders organize, communicate, manage and support financial-wellness programs. Look for more of these providers at HR Tech in October, as well as HRE’s Health & Benefits Leadership Conference.

The recent government shutdown and its impact on the workers who were forced into an unplanned financial hardship are a potent reminder to HR and business leaders that the overall wellbeing of the workforce is of paramount importance. It will be an important agenda item for HR leaders in 2019 to understand how to use the lessons learned from the shutdown to inform ongoing and new investments in HR technology in support with financial wellness and overall wellbeing.

Steve Boese, HR Tech Conference chair
Steve Boese
Steve Boese is HRE's Inside HR Tech columnist and chair of HRE’s HR Technology Conference®. He also writes a blog and hosts the HR Happy Hour Show, a radio program and podcast. He can be emailed at sboese@lrp.com.