The silver lining of COVID-19

The Government restrictions in recent weeks have severely confined people’s movement in order to prevent the spread of COVID-19, causing the majority of firms to move to remote working. 

Given the seriousness of the pandemic situation, the changes have occurred at a faster pace than what would have been anticipated in normal circumstances and some firms may have never considered home working until now.

As a result, numerous tools for conducting advice meetings online or via telephone have been created and advisers are meeting clients over Zoom rather than face-to-face. In some instances, this has been initiated by the client rather than the adviser as they feel uncomfortable coming into an office. Many have since indicated they could keep working this way as it was more efficient from a time perspective. 

Although the overall impact of the shutdown on the workforce is yet to be assessed, it seems highly likely that the flexibility of work arrangements which businesses and employees have had to adopt will stay in place for longer than the pandemic and could particularly benefit female employees.

WHAT DOES FLEXIBLE WORKING MEAN?

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According to the Workplace Gender Equality Agency (WGEA), an Australian government statutory agency responsible for promoting and improving gender in workplaces, flexibility is defined as a work arrangement between a workplace and an employee to better accommodate an employee’s commitments out of work. This can cover changes to hours, pattern and location of work such as working from home, more flexible hours, compressed working weeks or job sharing. 

However, at the same time, the WGEA stressed flexibility does not mean, although it gets often confused with, relatively minor work adjustments such an employee taking time off as carer’s leave, compassionate leave or parental leave.

While part-time work is currently considered to a flexible working arrangement, the realities of part-time work are often much the same as those in full-time work and may not offer much flexibility around time or location of work, the agency said.

Given the current COVID-19 pandemic situation has forced many businesses to choose between adapting rapidly to flexible work arrangements or facing a complete shutdown, it might be expected that the role of the flexibility in the workplace will become more significant going forward.

CHANGES POST COVID-19

According to Alva Devoy, managing director of Fidelity International Australia, the current working arrangements represent a huge shift in society and will play an incredibly important role in improving women’s participation in the broader workforce and their ability to stay connected to their workplaces. 

“I think that is going to be one of the most powerful effects out of this,” Devoy noted.

“If you look around pretty much every company today has had to adapt to flexible working so I think one of the biggest silver linings to come out of the COVID-19 is flexible working that will be now available to all.”

Devoy also stressed current circumstances have forced more men to adopt this sort of working arrangement and those who would have never previously chosen to work from home are now forced to do so. 

“I think that levels the playing field, and hopefully makes it easier for women overall to participate and to do well in the workforce.”

Danielle Welsh-Rose, environmental, social, and governance investment director – Asia Pacific at Aberdeen Standard Investments, had a similar opinion and said this was a good time for women to have this conversation with their firm. The fact men were also being forced to work from home, share space with family and physically juggle childcare would hopefully influence the way men and women saw each other in the workplace.

“It will make workplaces more family friendly to everybody and that might play to gender balance. That’s my optimistic view,” she said.

Jodie Blackledge, chief financial officer and chief operating officer at Fitzpatricks Private Wealth, said: “I would say that our level of productivity has actually gone up in this phase of working from home, not down, and I think it gives a lot more confidence to people in business and I think that will benefit women. We are in this together and we’ll get through it.”

Welsh-Rose said the financial services sector, in particular, had a pronounced gender problem as its pay gap was one of the highest of all sectors. The financial services pay gap is 22.2% compared to a full-time national average of 13.9%. 

However, the good sign was that gender-related conversations in the workplace were happening, even though there were still a lot of roadblocks standing in the way. These included the lack of career advancement as women were still not getting promoted to the senior positions as often as men.

In 2014, some 15.7% of chief executive officers were female but in 2018, this was 16.8%, a rise of just 1.1%, according to the WGEA.

“The issue has been identified but if we are not doing anything to remove these barriers then nothing will change,” Welsh-Rose said.

“I think one of the interesting conversations around diversity more broadly, as well as gender diversity, is the focus that we put on the discriminated against group to change their behaviour to succeed.

“The focus needs to be taken off women and put on men. Because the barriers are essentially around the lack of diversity, and the ones making decisions turn out to be the men,” she said.

When asked about how the industry could help promote women, Blackledge said that Fitzpatricks, where women constitute 20% of its adviser cohort, operated a number of peer groups to help advisers share their knowledge and intellectual properties. Among these was one dedicated to female advisers which aimed to help build communities that support the progress of women.

“I think when you can create that environment and encourage the women to take the next step or to build their practice further or to move towards more high-net-worth clients then you are sort of building that momentum within the culture of your business and to me it’s really important.”

JOB SECURITY

Aside from the changes to working from home, the pandemic has also brought up issues surrounding job security. So far, hundreds of thousands of people have lost their jobs, been furloughed or had to work reduced hours. 

According to the Australian Bureau of Statistics, there was an 8.9% reduction in total wages between 28 March and 4 April for workers in the financial services and insurance sector.

This was particularly important for women as they were more likely to have a lower volume of savings to fall back on in the worst-case scenario.

Research by Fidelity International, which was published in March as a part of the company’s value of advice study, found women were still more vulnerable when it comes to job security, with one-in-three saying they could only last up to a month in case of unexpected job loss. By comparison, only 24% of men could say the same.

On top of that, almost half (44.1%) of Australian women, compared to only 29.7% of men, said they would not be financially stable if their relationship or marriage came to an abrupt end. 

For those who had lost their job, there was the option to access up to $10,000 of their superannuation. However, this was another problem for women as they usually had a much smaller super balance than men, meaning accessing it now could be detrimental to their future retirement. 

Some 38.7% of women surveyed by Fidelity said they felt unprepared for retirement. The study further found that overall only 28.8% of women felt very or reasonably prepared for retirement, compared to 42.2% of men. Another 60.1% of women said they believed they may have to keep working past retirement age to fund their retirement, compared to 50.1% of men.

“If you ask a man what he would need for his retirement the average answer that you get would be $1.5 million and the answer that you would get from a woman would be $1 million,” said Devoy.

“So already you’ve got women thinking they need one-third less in retirement despite the fact that they will probably live for seven years more on average versus men and that through their working lives they will probably need to take career breaks in order to have children.”

The lack of financial awareness was echoed by Marisa Broome, chair of the Financial Planning Association of Australia, who said financial literacy among Australians was low and that women lacked confidence about their finances. In crisis times like this, this meant the value provided by a trusted financial adviser became even more obvious 

“I think that generally in Australia, for a developed country with a really powerful superannuation system, our level of financial literacy is quite low.

“We are in a difficult time and this the perfect time to reassess – it’s a great time because people have a little bit more time on their hands. So if you are lucky to still have a job it’s the best time to get yourself organised for your life.

“One of the really important things about finding an adviser is understanding this is someone who is going to be in your corner for the long-term. The advice you receive will only make that positive difference in your life if you keep going back and seeing them. So having a relationship with someone you trust is critical.”