SmartAdvance helps employers launch financial wellness programmes for their staff.
Financial wellness is a topic that frequently pops up amongst employers. With most employees being stressed and worrying about their finances at work, it’s not hard to see why. But what is employee financial wellness? What does a financial wellness program look like, what are the potential benefits, and what can you expect when partnering with SmartAdvance?
Implementing a financial health strategy for your employees
The solution to this challenge is two-pronged; financial education coupled with products and services that encourage behaviour change and improve consumer financial health. Employers implementing financial wellness programs should ultimately aim to provide employees with financial knowledge and access to financial products that help them get out of debt, spend and save. One approach cannot exist without the other.
Once a company has accepted the importance of financial wellness in their employees’ lives, employers should note their staff’s specific needs and understand that solutions are not one-size-fits-all.
Below are ways to get your employees out of debt:
Provide employees with responsible financial help South Africans face the highest inflation rate in 5 years, with inflation sitting at 6,5%. The ramifications of this record-breaking high is an annual price increase in a wide variety of goods and services, such as:
- Fuel: +32.5%
- Electricity and other fuels: +14.4%
- Public transport: +12.5%
- Meat: +9.4%
- Bread and cereals: +8.4%
With rising living costs, consumers are dealing with the reality of trying to afford the same goods and services for higher prices. South Africans are being driven to rely on credit for day-to-day costs. South African Reserve Bank reports suggest that about R750 out of R1000 is used to service debt by South African households. This shortage of funds pushes consumers to consider dire solutions such as getting a loan from an unlicensed moneylender, such as loan sharks.
As an employer, it is your responsibility to assist your employees. It is essential to understand and respond to the financial problems they face. This does not imply your responsibility to pay off their debts; instead, you should provide as much support as possible to ease your employees’ financial pressures.
A solution to this challenge is to partner with a financial wellness provider, such as SmartAdvance. We offer your employees secure payroll deduction loans which significantly reduce employees’ monthly debt. This product aims for over-indebted employees to gain control over their debt and give all employees the relevant tools to manage their money better.
Below are the employee benefits of a payroll deduction loan:
They are protected: By law, an employer has to make sure that debt repayments do not exceed 25% of an employee's gross pay.
They save: There are no bank charges involved in a payroll deduction.
Convenience: Employees don’t have to make special arrangements to repay their loans – the instalments are deducted automatically. With SmartAdvance sales staff on-site, it is also easy for you to do business with us and have your questions answered and problems resolved.
Cheaper credit: The agreement between SmartAdvance and an employer guarantees employees a lower interest rate on their loan.
Below are the employer benefits of a payroll deduction loan:
Productivity: Employees who are not worried about money are more productive and less likely to make mistakes and break safety rules.
Loyalty: Employees will feel that you care about them and, as a result, will be loyal and hard workers.
Reputation: Gaining a reputation as a responsible, caring employer.
Prevent employees from falling into a debt-trap:
The focus of a financial wellness programme is often on reducing debt, but another approach can be to help staff avoid debt altogether. Usually, debt reduction solutions lessen the financial burden, but the stress remains. This is where wage streaming is different since it helps staff avoid debt in the first place.
Wage streaming allows employees to stream some of their earned wages. It is directly deposited into their bank account, assisting them when needed to avoid bills and expenses putting them into debt.
An additional focal point of financial wellness programs is financial education and training. Financially literate employees manage their money with more confidence and have a better chance of handling the inevitable ups and downs of their financial lives and how to address any issues that may arise.
This helps employees navigate the pitfalls of debt by creating an understanding of it. This includes the benefits of repaying and avoiding debt. This enables employees to seek out the lowest interest rates when applying for loans and pay off monthly credit card balances to avoid interest charges. They can select the best methods to get out of debt if they have already accrued such debt.
Financial education will also teach employees to protect themselves from debt and bankruptcy by creating an emergency fund to fall back on when unexpected expenses arise.
Provide a financial literacy programme
Once employees are out of the debt trap and have regained financial freedom, this is where they need the most assistance. It is within your means to ensure they do not fall into a debt trap. Partnering with a financial wellness provider like SmartAdvance gives your employees access to financial education courses that offer an easy-to-understand approach to help them get out of debt, build wealth, and change their financial futures.
SmartAdvance provides training on various financial topics to educate your employees and improve their financial stability. Our training helps create financially literate employees who manage their money with more confidence and have a better chance of handling the inevitable ups and downs of their financial lives and how to address any issues that may arise.
This helps employees navigate the pitfalls of debt by creating an understanding of it. This includes the benefits of repaying and avoiding debt. This enables employees to seek out the lowest interest rates when applying for loans and pay off monthly credit card balances to avoid interest charges. Financial education will also teach employees to protect themselves from debt and bankruptcy by creating an emergency fund to fall back on when unexpected expenses arise.
Modules are flexible and can vary from five hours to three days, depending on the level of detail required on the given theme.
Financially literate employees are more likely to avoid making the same poor financial decisions.
Create happier, healthier, and more productive employees
Let’s look at the employee benefits of implementing a financial wellness program throughout your company:
Reduce mental stress
Financial stress results in absenteeism and tardiness amongst employees. Providing employees with the necessary financial products and education can help alleviate this burden. Furthermore, these programmes reduce employee stress levels and increase their overall health by providing them with the tools they need to take control of their finances.
Increase in employee satisfaction
Employees who have access to financial wellness programs have reported greater professional satisfaction. Programs let them set and achieve personal financial goals, including building an emergency fund, upgrading their homes, and much more.
An employee prepared for unexpected financial emergencies can engage more at work. This is because they do not have to worry about their long-term finances. Increase in leave days
Employees who worry about money miss two more days per year than their unstressed colleagues.
Financial wellness programs offer many free resources to help employees during the workday. Whether it’s financial education classes, career coaching, or benefit programs, financial wellness programs help employees reduce finance-related health symptoms. Instead of sitting in a doctor’s office for long periods, less stressed employees can use their leave days for relaxation and rejuvenation.
It is not only employees that gain benefits from financial wellness programs. Employers do
as well, and below are some of the benefits that you as an employer can expect:
Increased productivity
Employees whose financial pressure increased due to the pandemic are more likely to admit that their finances are distracting at work.
Luckily, financial wellness programs can provide employees with alternatives to stressing over their finances. Financial education courses, benefit funds, and financial aid products can alleviate employees’ money worries. Thereby, productivity increases and your organisation will be able to thrive as you reduce these types of stresses.
Reduce absenteeism
According to research from the Society for Human Resource Management, financial stress results in a 34% increase in absenteeism and tardiness.
Money-related stress can also lead to increased presenteeism; employees come to work despite being physically or mentally unwell. While it may seem less harmful, presenteeism seriously affects organisations and can cost them a lot of money. Companies save on labour expenses when employees don’t miss work due to financial stress.
If you are one of the growing numbers of employers launching financial wellness programmes for employees to enhance your company’s bottom line and improve your employees’ lives, get into contact with SmartAdvance to find out how we can get you started.
