Ally Financial’s COVID-19 strategy: Embrace employee benefits
Like many employers, Ally Financial was watching the coronavirus when it appeared earlier this year.
The Detroit-based bank, which employs some 8,700 workers, kept an eye on the outbreak, says CHRO Kathie Patterson. As talk worsened, bank leaders began exploring potential points of action, especially for remote work—something that isn’t easy for security-conscious financial companies.
“Our pandemic plans look good on paper, but unless you actually experience it, you don’t know the unintended consequences,” she says.
In the second week of March, the company did a test run of work-from-home—excluding some essential workers who didn’t have the capabilities—to learn what worked and what didn’t.
It was shortly after that when the World Health Organization declared coronavirus a pandemic, forcing Ally to become one of the many employers to react swiftly and turn plans in action. The company worked to get most employees out of offices and working from home. But corporate leaders knew they had to do more, Patterson says.
As employees became anxious about the situation and in need of help, the company turned to a simple strategy: employee benefits.
“As soon as we got employees out, all the schools were being canceled and childcare arrangements weren’t the same—and at that time we stepped back and revisited all our benefits,” Patterson says.
A slate of new and enhanced benefits were added, including:
- immediate paid medical leave for any employee diagnosed with COVID-19;
- 100% coverage for virtual doctor visits and online health services;
- two weeks of paid caregiver leave for employees caring for a family member with COVID-19;
- 100% coverage for diagnostic testing and the associated visit related to COVID-19; and
- expanded childcare support (the company increased the days covered to 30 days from 15 days.).
Employees had their own paid time off bank, but with the pandemic, the company waived its requirement of using five sick days before starting short-term disability.
After it became clear that employees had some incremental costs to deal with in their new reality—home wi-fi, more supplies, or help with childcare, for instance—the company decided to offer employees making $100,000 or less a one-time $1,200 tax-free financial assistance payment.
“It was so very clear to our leadership team that the biggest support we could provide to our employees was to make sure we are providing the right support,” Patterson says. “It’s total rewards—it’s the financial security as well as giving them assurance that if they get sick tomorrow, we got them.”
Employees reacted positively, she says, and had a “deep appreciation” for the new offerings, especially as stress and anxiety about fallout from the pandemic ran rampant.
The other part of her strategy was making sure the benefits Ally already offered—telemedicine, free financial counseling and mental health assistance among them—were getting attention and were being effectively communicated. The company ramped up communication and information about a plethora of benefits Patterson thought employees would embrace during trying times.
“A lot of our benefits are well-designed to address these moments. The problem is, a lot of employees don’t know or remember these benefits,” she says. “We did significant reminders about telemedicine, the fact that we provided caregiving leave to take care of a loved one, and our elder- and childcare benefits.”
The bank isn’t the only company to turn to new—and old—offerings to help employees during the pandemic: A handful of companies are offering extra paid time off for those who are sick or self-quarantined, as well as childcare support and caregiving leave to help family members who are sick with the virus. Facebook, Kroger and JPMorgan Chase also added bonuses.
Still, in an economic downturn, cutting employee benefits is a strategy some employers are turning to in an effort to hold down costs. Initial research from consultant Pearl Meyer, for instance, found that 6% of companies have reduced or eliminated employer contributions or matches to their retirement plan, and 16% are considering doing so. Other experts predict more companies will follow suit not only with 401(k) matches, but voluntary benefits and even employer-sponsored health coverage.
For Patterson, cutting benefits “wasn’t even an option. It was clear this was going to be our focal point in the pandemic.”
Instead, Patterson says, relying on robust benefits to help employees during a crisis is a “little bit of no-brainer.”
“Our employees are struggling,” she says. “As a company, we say we like to demonstrate a high degree of care. This is the moment you’ve got to walk the talk.”