In a world that revolves around money, many worry about meeting their financial requirements. In fact, money-related stress is the most widely reported form of stress at workplace. Financial stress can be detrimental to the quality of life leading to reduced employee productivity, and ultimately impacting business profitability.
In a session at the recently concluded HRIA, Mumbai Chapter; Vikas Sekhri, Head of Strategy EarlySalary & Founder of CashCare, spoke with two seasoned HR professionals – Satish Mohapatra, VP HR Siemens and Naresh Taneja, GPHR IRB Infrastructure on the importance of Financial Wellness. The knowledge filled session on ‘Financial Wellness & Technology’ featured several eminent HR experts discussing the role of technology and how it has provided organizations with an opportunity to enhance employee productivity through new age employee benefit products.
Understanding Financial Wellness
In Satish’s words, “Financial Wellness means that an individual understands their financial situation and is prepared for financial ups and downs. It’s more than reading an article about taxes or retirement planning, or even having an emergency fund. Being financially well means a person understands his or her financial situation in the context of their life and goals.” Having a financial plan that an employee can follow through allows them to feel confident, handle unexpected expenses, make progress toward personal goals, and be positioned to live the life they want to live.
There are hidden costs directly associated with lack of financial wellness among employees. Some experts estimate that these combined costs can total as much as 15% to 20% of a company’s total compensation paid to its employees. Reducing these events and their associated costs even by 5% can result in considerable cost savings, improved productivity, and increased profitability.
Naresh provided a refreshing perspective by emphasizing how financial education alone is not enough to change behavior when it comes to personal finance. “Choosing and implementing an authentic, effective financial wellness solution that is the best fit for both employers and employees is a win-win: when employees have a greater sense of choice and control over their personal finances, they are happier, healthier, more productive, and more likely to stay.” Explained Naresh.
Need for a Financial Wellness Program
Mismanaged finances, unchecked credit card bills & bank debts can lead to higher level of financial stress amongst employees. With a wellness program in place, these financial roadblocks can be avoided.
The increasing focus on financial wellness in the workplace is a natural evolution of programs employers have developed over past decades to support the physical and mental health of their employees. Effective financial wellness programs can help companies significantly reduce costs, attract and retain top talent, and boost employee productivity.
By planning and implementing a financial wellness program supported by technology and human guidance, this gap the industry is experiencing can be bridged, and this bridge helps everyone. Comprehensive financial wellness programs create new revenue streams and deeper relationships from advisors to plan sponsors.
The Role of Technology in Financial Wellness
As many solution providers seek to jump on the financial wellness bandwagon, choices among financial wellness and financial wellness technology solutions are proliferating. An authentic and effective solution provides more than just education to improve employees’ financial literacy, or calculators to track spending and saving—it should also promote behavioral change for employees.
Here are few up and coming Financial Wellness offerings discussed amongst panelists:
- Robo-Advisors: Robo-advisors are basically computer programs designed to give you a curated financial plan with minimum human interference. Robo-advisors are powered by complex algorithms that auto-allocate your investments. They are a great start for people with no experience in financial planning.
- Dedicated Vouchers: In today’s corporate world, most of the companies are giving their employees dedicated vouchers so they spend less money. These include food vouchers by Zaggle, Sodexo, etc. These vouchers are quite widely accepted but are used mostly for purchasing meals within office premises. This greatly impacts productivity, while also encouraging employees to invest the money they save through such coupons.
- Salary Advances: Salary advances can be described as paying a part of the salary in advance. Usually, if salary advances are the norm, 40% of the salary is paid by the 15th of the month, while the rest is paid on schedule. Salary advances can help employees create and stick to a budget, because they receive their income twice a month, instead of a single day of payment.
EarlySalary: Your Financial Wellness Partner!
Choose Us for Your Financial Wellness Needs!
As a company dedicated to helping improve the level of satisfaction people feel about their finances, EarlySalary is a technology platform that easily assists business owners and HRs in guiding their participants to achieve financial wellness.
Visit our website www.earlysalary.com and find out more.