The employer-employee relationship has come a long way in today’s time, having evolved from being merely a linear chain of command in the workplace to a dynamic and multi-faceted relationship transcending the boundaries of a workplace.
In times where financial wellness and financial planning are an inalienable part of every individual’s life not just in the professional sphere but also the personal one, it becomes pertinent for the employers to make certain stipulations to take care of it. A well-rounded way to do so is by way of providing them with a financial wellness program.
What does a Financial Wellness Program mean?
Evolved out of the growing need to handle complex financial situations of organizations as well as individuals, a financial wellness program aims to provide adequate information and assistance to employees with regards to handling their personal financial situations. It includes assistance on matters like consumer credit building, financial goal setting, financial crisis management, personal and household budgeting among others.
With the right guidance, employees will be able to take care of their personal goals and also effectively contribute more towards the organizations’ goals. However, there is no straight-jacket formula to launch and maintain a successful financial wellness program. It involves several facets, such as:
- Workshops and training programs by financial professionals
- Dedicated Portfolio managers for individual financial needs
- Partnership with Financial wellness organizations
- Easy loan schemes and tie-up with Banks
- E- support by way of an online portal, AI or even an App
Why Financial Wellness Programs are critical
Financial wellness is a prerequisite for a productive employee. In fact, according to a 2017 report on optimizing financial wellness programs, employees with low financial wellness and high financial stress cost their employers directly, in the range of tens of thousands of INR per employee, annually.
This financial stress is detrimental to the efficient functioning of any organization. This was clearly illustrated by a 2018 report by the firm John Hancock which observed that 69% of the workforce was stressed about their finances, with 72% admitting to worrying about their personal finances at work, and one in three doing so more than once a week. This directly affects their health and also their productivity at work.
It is clear as day that the traditional approach to employee benefit is no longer effective and if the growing needs of the employees are not taken care of, it seems to have dire effects on the overall performance of the organization.
What do financial wellness programs bring to the table?
Even though it may seem to many that handling personal finances of individuals may lie outside the scope of the workplace, this isn’t necessarily true in today’s evolving work scenarios. In fact, as employers move towards rolling out financial wellness programs, they are also routinely expanding its already existing contours. The reasons for this are obvious. Even back in 2018, ASSOCHAM estimated a savings of over $20 billion for Indian organizations adopting financial wellness programs. Meanwhile in the West, according to research from the Bank of America, half of the employers (53%) in the US now offer such programs compared to only 24% in 2015. This goes on to prove that the benefits of the said program accrue to both the employer and the employee. Some of the major benefits to employees include:
- Lower stress to the individuals about financial wellness
- Easier asset creation in terms of real estate, investments among others with the assistance of the employer
- Better planned long term investments for post-retirement security
- Easy repayment for personal loans
- Elevated job satisfaction
All of these contribute to making an individual professional more focussed, efficient, and dedicated. As an HR professional would know, this not only helps in personal growth but also assists teams with the bigger picture.
Apart from the obvious benefit of having a dedicated workforce, some other benefits which accrue to the employers include:
- Increased employee productivity leading to better results
- Improved task force management
- Lower employee absenteeism
- Lower employee turnover
- A conducive work environment that attracts better prospective employees and goodwill in the market
- Lesser need for paycheck garnishment
- Stability in the organization attract better clients and investors
- Increases the prospects of expansion
Executed correctly, it can be a win-win situation for both employees and the organization.
Having clearly understood the importance of financial wellness programs and the kind of benefits that accrue from it, it is a no brainer and all organizations should include it as a sine qua non in their employee benefits scheme. In fact, that is precisely the reason why an increasing number of organizations are enthusiastically opting for it.
However, the next very important aspect to be considered is that the program should not just merely be one launched to check the box off your list of initiatives. Your employees should actually, truly derive the intended benefits. In today’s time, with several of these programs available, finding the right one can be a tough choice. EarlySalary recognized this need early on and offered corporates a simplified solution with the EarlySalary financial wellness programme. With features like instant advance salary, school fee financing, provisions for medical emergencies, it is a one-stop solution for all financial needs for the employees in these uncertain times.
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