How to help your team manage their personal finances?

There are few moments in life as trying as when one faces financial challenges. In South Africa, consumer prices are steadily increasing [1], meaning the cost of living is consistently increasing too. It becomes harder to purchase the things you want and need, for example, over the past two years the cost of chocolate increased by 39%, fruit by 16% and vegetables by 20% [2]. 

The result of this is a slow and steady squeeze on personal finances that can cement a person down if they are not financially vigilant and proactive.

Regardless of the demographic of your employees, the chances are that many of them are currently experiencing financial stress in some shape or form. This might be due to getting out of debt, improving their living standards, preparing for retirement or just trying to reach life and financial goals.

Stress in general affects our health as well as our ability to concentrate, and with financial stress this is no different. For some, this type of stress may even be magnified. Financial stress has an impact on individual productivity through decreased focus at work as well as absenteeism due to the physical illnesses stress may cause [3]. Not surprisingly, employee surveys have shown that employees feel that personal financial stress negatively impacts their ability to perform [4]. Highly stressed individuals become increasingly withdrawn and less engaged.

Everyone aspires to be financially free, to provide for their families and achieve their personal goals. However, not everyone received the right advice early enough in life, or they perhaps did not apply the necessary discipline and self-control to benefit from the compounding effect of wise financial decisions. This becomes the business case for employee financial wellness programmes.

Successful organisational financial assistance and education programmes have shown an improvement in the financial outcomes of employees as well as the organisation in that [5]:

• Employees made fewer requests for advances on salaries;
• Employees were more involved in contribution plans;
• Employees experienced decreased financial stress which improved their productivity, reduced absenteeism and increased employee engagement.

Individual financial stress will be detrimental to your organisation, while alleviating financial stress will have a positive effect on employee wellbeing and engagement [6]. It is therefore in an organisation’s best interest to ensure that their employees become financially savvy. 

You can decrease the financial stress of your employees and the effect thereof on your business by increasing your financial wellness offering to employees. Invest in financial planning, advisory and educational services so that employees can be free to focus on the work they are doing. A few questions you can ask yourself:

• What are the debt levels of your employees?
• Do they have a retirement plan?
• Do they have emergency funds available?
• Do they have medical aid cover?
• Do they have financial saving mechanisms in place either through tax-free saving vehicles or other investments?
• Are they working towards financial goals?
• Are they educated in personal finance, and are they making wise long-term financial decisions?

Author

Estée Roodt (MCom Industrial Psychology)
Estée is part of our Behavioural Specialist team here at Workpoints. She is our keen researcher, our problem-solver and our number one sports star.

Workpoints is a fully featured reward, recognition and incentives platform that provides you with the tools to create a high performance organisation. Our easy-to-use application integrates simply into any organisation and instantly encourages staff to do the daily grind with excellence and energy. 

Visit www.workpoints.co.zawww.workpoints.co.za for more info and a free trial!

References

Crawford, R. (2014). Financial stress impacts work productivity. Employee Benefits, 3.

Faragher, J. (2014). Financial aid for employees. Occupational Health, 66(10), 20-21.

Sammer, J. (2012). Financial Education - Stress = Improved Productivity. HR Magazine, (June), 71–76.

South Africa Inflation Rate. Trading Economic website. Retrieved 19 August 2016 from http://www.tradingeconomics.com/south-africa/inflation-cpi

The secret life of a slab of chocolate. Statistics South Africa website. Retrieved 19 August 2016 from http://www.statssa.gov.za/?p=8012

[1] Trading Economics (2016)

[2] STATSA (2016).

[3] Sammer (2012)

[4] Crawford (2014)

[5] Sammer (2012)

[6] Faragher (2014)