Supporting Employee Financial Wellbeing: A Guide To Debt Management

In recent years, it has become clear that businesses cannot afford to ignore employee financial stress and its effect on the workplace. It's no secret that the economy is in a state of flux right now. People are still adjusting to being laid off or having their pay reduced. Employee financial stress is natural, and it shows no indications of abating anytime soon. 

Surprisingly, businesses may be ignoring the cause of financial stress among their employees.

Clearly, now is the time to start helping your employees understand their debt landscape, educating them on how to manage debt, and then providing an employee benefits solution that will work to solve their financial concerns. This will boost productivity and promote loyalty to your company.

Understanding And Planning The Financial Landscape

An Ernst & Young study shows that 81% of Indian employees deal with financial crises between pay cycles. If employees don't know their financial condition, it can be hard for them to manage their debt. This has led employers to offer financial education benefits. Teaching employees proactive planning and budgeting will help with their financial well-being. When they meet unexpected financial stress, they will be better equipped to handle it. 

To empower employees to work towards financial health, educate them on the following:

• Tackling credit card debt
• Canceling unused services
• Contributing to an emergency fund
• Tracking purchases and spending
• Budgeting for monthly expenses
• Investing options for short-term and long-term financial goals
• Saving schemes to secure financial future
• Increasing contributions to retirement funds

Set a savings goal

Each employee will have different financial targets and goals. They may save to buy a new home, pay off their debts, plan for their children's education, etc. Listening to individual employee needs and helping them to reach their goals using the SMART (specific, measurable, achievable, realistic, and timely) framework will be beneficial. 

Empower Employees With Financial Education

As a part of employee financial well-being benefits, offer financial education to all employees. They can plan for a better future if they learn how to manage their income and invest wisely. When the employees start making smart financial decisions, it will lead them to personal financial success. 17% of the Indian workforce constantly worries about financial instability. The right financial education will give them access to strategies and resources to achieve their financial goals. When employees are relieved of financial stress, they will be more productive. 

Getting Ahead Of Debt: Employee Benefits For Financial Freedom

41% of young Indian workers worry about their day-to-day finances. Financial emergencies arise out of nowhere, and employees worry they may be unable to face them. To ease the financial burden, employers can provide access to short-term funds through multiple avenues. Employers can offer benefits that help employees manage their daily cash flows with an advance against their salaries.

Some of the benefits of cash advances are:

Increased Employee Productivity

Employees will feel more engaged if they know they can get financial assistance in times of need. It boosts their happiness and productivity at work. For example, if employees worry about the EMI payment deadline, they won't be productive at work because they will be consumed by financial stress. However, when the employer steps in and provides a salary advance loan, the employees need not worry and concentrate on work. 

Reinforced Loyalty And Workplace Morale

Offering salary advance loans will encourage employees to reach out to employers when they have financial worries. They don't have to look out for other lenders because their employer extends financial help. It will improve employer credibility and fosters loyalty. Loyal workers increase workplace morale. 

Improved Employee Welfare

Employers offering salary advance loans directly contribute to employee financial well-being. It improves brand reputation and social standing. Employees will know they are cared for by the company, which greatly helps in employee retention. 

Key Takeaways

About 64% of Indian employees with modest incomes saw a rise in financial stress. Employers must take proactive measures to help their employees deal with their financial burden. While offering a pay rise is not possible with a looming economic depression, companies can extend help to those in need in a timely manner with a customized debt management and employee benefits program. Salary advance loans and cash advances for emergencies will show the employees that the company cares for their financial well-being.

Find new possibilities of assuring a financially secure future to your employees

A strong employee debt management program must provide advanced cash benefits for employees when needed. Partnering with Batik will enable employers to meet the emergency fund demands of their employees more readily. Batik has joined hands with Karmalife to provide easy and unified access to last-minute expense needs of employees.

‍Batik provides on-demand access to earned wages through a systematic employee engagement and well-being program. Employers can support their employees who live from paycheck to paycheck.