Employee financial stress has intensified overtime, particularly in the Post-COVID-19 era and this can go a long way to affect the performance of employees. According to the PwC Employee Financial Wellness Survey (2021), workers who have experienced
significant financial stress are roughly four times more likely to confess that their finances have caused them to be distracted at work. Although it is without doubt that individuals working in an organization are responsible for their own financial growth, there
is a cause for organizations to be concerned about the financial well-being of their workers. Due to the implicit benefits that organizations enjoy when their workers are financially sound, it is prudent on the part of organizations to consider how they can facilitate the financial progress of their employees. What follows are some suggestions on how businesses might help their employees thrive financially.
Providing Financial Education
Promoting financial literacy in organizations can make a significant difference in employee financial well-being. Financial growth has less to do with how much you earn and more to do with the quantity of knowledge and practice on managing what you earn. If workers are not aware of how to manage their income effectively, then they may find themselves in a financial bind. Based on a study by the School
of Economics, University of Cape Coast, Ghana, individuals who are financially literate are less likely to be in financial hardship. Corporations can organize seminars, training and workshops to impart financial knowledge into their workforce. Relevant, experienced
and knowledgeable personnel from within or outside the organizations could be sourced to handle these trainings and seminars on budgeting, long term and emergency savings, insurance, investments and pre-retirement financial planning. Employers can also provide their workers access to resources about mortgages, income protection, debt management, taxation, wills and personal financial risk management to increase their financial savvy.
Work-life Balance Approach
Being able to strike a balance between time spent in personal matters and time spent in working can be tremendously hectic for individual workers. This makes it difficult for workers to get adequate time to make effective financial decisions. By adopting a
corporate culture with policies that are adaptable to meet evolving demands, organizations could create an environment where a healthy worklife balance can be achieved. Policies such as flexible working hours and schedules, paid-leaves and telecommuting could be implemented by corporations. These measures help to promote a good work-life balance for its employees, hence lowering stress levels. As stress may have a detrimental impact on financial performance by influencing bad decision making, reducing stress to the absolute minimum via work-life balance can strengthen employees’ financial situation.
Coaching or Mentorship Program
Institutions could devise a framework in which coaches and mentors are assigned to their employees. The superiors in the organization with higher financial knowledge and experience could act as mentors and coaches to provide counselling and financial advice to their employees. These mentors would inspire, listen and guide employees to set financial goals and priorities and work with them to achieve them. A mentorship and coaching program in an organization would help create an environment where employees could unhesitatingly run to their mentors when faced with tough financial decisions for advice. Coaching and mentoring workers on financial matters would encourage financial responsibility in employees while they develop good financial habits such as the saving culture which could
cause a significant growth in their personal finances.
Encouraging Employees to Take Personal Insurance Policies and/or Investment Products
Employees, like everyone else, are subject to unforeseen occurrences on a regular basis, and these unexpected situations might put a strain on their income, causing them to save nothing. Workers would be able to save more and develop a better financial situation if their employers encourage them to purchase insurance policies to help limit losses and protect them against unanticipated disasters.
Moreover, if workers are encouraged by the organizations they find themselves in to patronize investment products, they would be able to take advantage of the compounding power of interest and grow what they save. Employees should be taught to invest in not too
risky products to ensure that their principal is protected whiles they earn interest on their money.
Funds and making regular payments on behalf of employees
Employees should be made aware that it is their obligation to check if their social security payments have been paid: companies can encourage their employees to request for quarterly or semi-annual statements in order to keep track of their contributions.
In conclusion, we see clearly from these considerations that employers can play a substantial role in the financial
progress of their staff. To the benefit of both the business and its employees, companies should consider putting these concepts into effect.
Compiled by:
The Research Team of InvestEye Capital Partners Limited
Akosua Ofeibea Ofori-Agyei (a.o.ofori-agyei@ investeyecapital.com)
Nana Osae Addo-Dankwa : (n.*************@in**************.com)
