We tend to think that divorce is a strictly personal issue. Yet, if your employees are facing divorce or other significant life changes, your company will face some challenges, as well. The main reason is related to a general decrease in employee productivity – and that casts a wide net both in terms of financial costs and team obligations.
The Financial Burden of Divorce
You may be surprised to learn that relationship-related stress — especially divorce — can cause companies $300 billion a year. It is estimated that at least six months prior to announcing a divorce and at least one year after a divorce, an employee’s productivity drops by 40%. It will gradually increase each year after, but it’s not until six years after a divorce that an employee’s productivity is back to par. This is a significant financial loss for employers.
The Divorce Cascade
While someone on the team is dealing with their divorce, everyone around them in the office or on the team is affected. If their colleague is distracted and having a hard time staying focused on the job, or needs random time off to deal with their lawyer or court, which is a common side-effect of divorce, other team members must pick up the slack. The productivity of the divorcing employee’s co-workers is said to drop by 4%, while that of their supervisor drops by 2.5%.
According to financial analyst Rosemary Frank, over the course of several years, the divorce of a single employee making $60,000 a year costs $85,934 in lost productivity. This includes absenteeism, presenteeism (being on the clock but otherwise checked out), and other factors.
The Company’s Role
There is a way to help reduce the impact of divorce by educating employees about non-adversarial divorce processes, such as Collaborative Divorce, a voluntary, out-of-court settlement process that is less stressful than an adversarial divorce. The human resources team can be instrumental in sharing this model with employees contemplating divorce.
Many companies already have strategies to deal with a variety of employee-related personal issues that impact productivity. Family leave policies (for childbirth, a death in the family, the need to care for a sick child or parent) or for health issues, such as medical treatments or addressing a long-term illness. Although an estimated 10% of the workforce goes through a divorce every year, most companies have no resources for helping these employees and likely don’t know where to start.
How HR Can Help
The role of HR is to balance employee well-being, workplace culture, and profitability. When an employee’s divorce is going to cost the company money and impact morale, having a plan to help can be beneficial.
Let HR know when an employee is contemplating or in the middle of a divorce. Talk with the employee if you’ve noticed a drop in their productivity. Ask what the company can do to help them get back on track. Before you suggest a course of action, take time to listen. They may already have something in mind, such as taking time off to deal with the issue, or they may not have a clue, and sharing information about different ways to divorce, could help them move forward with less stress.
Keeping up with the modern trends in non-adversarial divorce options, such as mediation and Collaborative Divorce, will assure the employee that the company understands that this is a major life transition and HR can be a source of reliable information.
Real Life Assistance
Consider adding a Collaborative Divorce consultation or representation as part of your employee assistance plan. This can assuage the anxiety an employee is bound to feel when facing divorce. A simple consultation with a Collaborative Divorce attorney can offer the direction a confused or anxious employee needs before things get more adversarial and tense.
If you have an employee assistance plan that includes psychological counseling, be sure the employee knows about it. Employees are more productive when they are not stressed about their divorce process. A survey of workers who recently went through divorce or separation reported that 42% felt their employers could have provided more mental health support.
Since Collaborative Divorce doesn’t involve the court or the court schedule, an employee who chooses this option can have more control over their schedule, allowing them to plan divorce meetings around work duties and important business deadlines. In a traditional, adversarial court-based divorce process, employees may have little say and may need to reschedule business meetings or presentations around court hearings and attorney consultations that take place during normal business hours. If possible, your company should offer flexible work schedules to accommodate these necessary interruptions.
An employee’s marital status affects a wide range of practical issues: health insurance, retirement and pension plans, life and disability insurance. If their health insurance has been covered by their spouse’s plan, they may need to apply for health insurance through your company. Divorce is a qualifying life event that allows an employee to apply outside of the usual enrollment period. On the other hand, if the employee’s spouse is on the company plan, informing them about continuing coverage under COBRA, and the cost, will be welcome information.
Does your company have a leave policy? Allowing a team member to use their paid personal leave is a way to show support through this difficult time. Some companies also allow employees to take unpaid leave, if necessary.
Entering Into Collaborate Divorce
A contentious fight over how to split up assets or decide on custody of a child – which is common with most traditional divorces – is stressful and expensive for everyone. That’s why some companies are informing employees about alternatives like Collaborative Divorce.
Collaborative Divorce is a modern, interdisciplinary approach to divorce. It involves specially trained attorneys, financial experts, and mental health professionals who work together, which allows both parties to safely work through their marital issues and resolve their divorce in a civil, dignified manner. Collaborate Divorce is an out-of-court process designed to result in an uncontested divorce which is filed with the court. No one threatens to go to court, and no one goes to court to fight about children, property or support. The only time that court is involved, is at the end of the process, when the final settlement documents are filed by the attorneys. The actual divorce order may come in the mail!
Collaborative Divorce can help an employee get through the process more quickly and with a minimum of stress. It’s a win-win for everyone; the divorcing employee can get on with their life sooner, and by helping an employee avoid the contentiousness of family court litigation, the company supports its team members through difficult times, while maintaining productivity.
Nanci A. Smith, Esq., is an attorney licensed to practice in Vermont and New York. She is chair of the Collaborative Divorce section of the Vermont Bar Association, a leader in her collaborative divorce practice group, and a member of the International Academy of Collaborative Professionals. Smith is the author of “Untangling Your Marriage: A Guide to Collaborative Divorce“.