Log onto any news site or scroll through social media, and most days, you’re sure to see evidence of individuals experiencing some form of hardship in the world. Whether difficulties seen close to home or at the opposite ends of the earth, the gravity of the unexpected and the fallout it can sometimes cause is a fact of human existence.
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” — Theodore Roosevelt
In addition to the certainty of the uncertain is enhanced volatility exacerbated by various factors, including climate change, that can directly impact an individual, group or entire population. In fact, according to the Intergovernmental Panel on Climate Change (IPCC) — the United Nations body for assessing the science related to climate change — global warming has resulted in more frequent, intense and extreme weather events that have caused increasingly dangerous impacts on nature and people in every region of the world.
In just the last six months, there have been devastating natural disasters all around the world as well. Snowstorms in New York resulted in over $1 billion USD in damages and at least 34 deaths. Similarly, northern Japan received multiple feet of snow that led to 17 deaths, over 90 injuries, and millions in damages. Severe storms in California caused flooding and other damage, with experts estimating the final cost to be over $1 billion USD. Even more recently, two earthquakes ravaged Turkey and Syria, causing an estimated $34 billion USD in direct damages (and over $84 billion USD in total), as well as resulting in over 45,000 deaths.
Outside of volatility increased by climate change and natural disaster is that caused by conflict, war and varying forms of violence worldwide. In Ukraine — after close to 15 months since Russia began its invasion — at least 8,000 non-combatants have been confirmed killed and nearly 13,300 injured. More than 8 million refugees have since fled Ukraine, and the damage to the country’s infrastructure is estimated at more than $138 billion USD. Without question, for those thrust in the middle of this conflict, hardships abound.
Chances are, your company has detailed business continuity plans to keep the business operational in the event of an emergency, but — are you also thinking about how to help your employees? Given evidence of heightened, global volatility, business leaders worldwide need to ask themselves what they can do now ahead of disaster, conflict or similar unexpected hardships should the seemingly escalating worst occur for one or many of their team members.
Business-Forward Relief Fund Planning Options
In weighing options of how best to plan for global scenarios that might negatively impact employees, business leaders must consider how a formal initiative will affect overall business objectives and seamlessly integrate into a company’s broader vision.
One such option to consider employing companywide is the establishment of a disaster and hardship relief fund. Doing so — and engaging team members’ participation in contributing to it as part of a company’s broader vision — can make an impactful difference when team members themselves are in need.
But how does a disaster and hardship relief fund work — and why is it a viable planning tool for companies across the globe?
An employee assistance fund, or disaster and hardship relief fund, is a way to assist team members in need. Companies have the option of setting up a fund wholly on their own or alternatively aligning with a third-party administrator. Funds then need to be formally named, eligible applicant parameters set, organizations’ donations managed, and teams assigned to objectively review and award/distribute grants.
Depending on how the relief fund is set up and managed, when a qualifying, unexpected disaster or hardship befalls a company’s team member, that individual can apply for a grant and can receive financial assistance within days, sometimes hours.
At first glance, global organizations may decide against launching a disaster and hardship relief fund because of presumed challenges, but relief funds can be a valuable tool for companies for many reasons. Of course, there is the ability to assist those in need worldwide. This not only provides aid to affected team members but can also enhance overall team member affinity.
Relief funds can also boost employee morale and foster a sense of community within your organization, help mobilize employees around a common goal of assisting team members around the world and make a real difference in the lives of colleagues in need.
Company Relief Fund Return on Investment
Most relief funds are born in the aftermath of large natural disasters, or from events which affect many team members in a single locale — such as a flood or forest fire — to help provide financial assistance to team members in the future. But in terms of a company’s bottom line, where is the evidence of ROI?
The most easily measurable is the positive effect it can have on reducing turnover and related costs. Another, less easily measured effect, however, is the increase in productivity when team members can get back to work sooner. By helping affected employees deal with financial hardships that dramatically impact them and their families, these team members may be able to get back on their feet and back to work sooner vs. resigning and worrying about finding new employment once the proverbial dust settles.
Research by the Society of Human Resource Management suggests that replacement costs for a team member can be as high as 50%-60% with overall costs ranging anywhere from 90%-200%. For instance, if an employee makes $60,000 USD per year and resigns after an unexpected hardship, then it could cost an average of $30,000 – $45,000 USD just to replace that employee and roughly $54,000 – $120,000 USD in overall losses to the company.
Studies also show that the additional “ramp-up” costs to bring a new hire to the same competency level as a previous team member will cost between 0.5 to 1.5 times of the new person’s salary. For example, a $40,000 USD position would cost the business an additional $20,000 to $60,000 USD as the new team member becomes proficient in the job.
Ultimately, a company’s cost of operating a disaster and hardship relief fund is substantially less than the avoided cost of potential turnover for those same team members that, without financial relief, might otherwise look for other employment post a life-altering difficulty.
In the end, it is the leader who weighs both the business pros and the effect that right and compassionate decisions will have on their team members, regardless of where they are in the world, that lends some bit of security to this ever-volatile earth we call home.
By Douglas Stockham
Douglas Stockham is the President and Co-Founder of Emergency Assistance Foundation, based in West Palm Beach, Florida, USA, and serving organizations worldwide.
