Employee welfare is an essential part of any organisation. Employers undertake these plans in the interest of their employees, ensuring that the employees the comfort and happiness of the employees and to increase the efficiency of their work. While the ways in which employee welfare is undertaken differs from organisation to organisation, it is always undertaken to cater to the needs of the employees. These schemes are extended in various ways; be it financially or by distributing non-monetary incentives. While it is very important to ensure the comfort and happiness of the employees while they are providing their services to the organisation, it is just as important to consider their wellness after the retirement. Financial wellness programs are what the employers must look into to ensure complete comfortable work environment.
What is financial wellness?
After retirement, a lot of employees receive pensions. The pension that is received might offer some relief to employees after their retirement, it does not guarantee a secured future to them. The employer must ensure that the employees get the most out of it. Financial wellness program can help the employees who are planning their retirement. It gives a sense of financial security to the employees and thereby reducing financial stress.
The importance of financial wellness programs
The talent and the efficiency of the human resources is what improves the performance of the organisation and the efficiency of the staff largely depends on the work environment of the organisation. In order to make sure that the performance of the employees is of the highest quality, the employer must look into the well-being of the task force. Financial wellness programs will aid the organisation in increasing the quality of the work, the reason for this occurrence being that this policy relieves the employees’ financial stress off the employees’ which in turn improves the quality of their work. It also rises the work satisfaction of the employees and even improves their mental health. In addition to that, it reduces the employee absenteeism and builds the image of the organisation for its philanthropic activity, projecting it as a body that cares about the society and significantly contributes to its development.
Now that the importance of financial wellness program is established, the responsibility of the organisation towards this can be dealt with. Financial wellness is not as simple as crediting the pension amount to the employees’ account. It encompasses not just the monetary incentives but other investments that can not be measured in economic terms. The organisation must invest in arming its staff with knowledge and in retaining healthy communication with them even after the retirement.
This can be achieved in the following ways:
- Loan repayment: Loan is what plagues the minds of people once they enter the adulthood. The thought of having to pay back loans as soon as possible can be quite daunting, especially if the employees are retired. This problem adds to the stress of the employees and reduces their productivity. The organisation can overcome this by organizing seminars on this topic and making sure that the employees attend these.
- Emergency savings: Given the uncertainty of the future and adverse impact that the changes can have on the employees, it is better to invest in teaching the employees about the importance of emergency savings and various ways of making and using it.
- Financial goal setting: The best way to secure the financial standing is to define the ways in which the money will be spent. Having a clear view of the direction of the flow of cash helps in setting financial goals. The organisations must help their employees in defining their financial dreams (be it building a dream house or planning a world tour) and help them in planning it in the most economical way possible.
- Crisis mitigation: Risk of bankruptcy, unemployment and economic recession are a nightmare to anyone who is earning. While this risk can not be avoided completely, the shock that people receive due to this can be decreased by increasing their knowledge on these subjects and helping them plan for it. A well-defined plan can help the employees brace for the impact of these unforeseen events.
- Increasing savings rates: The organisation can help their employees in finding the best saving scheme. This can help the employees in increasing their savings. The organisations can even increase the pension amount in a significant yet manageable way so that the employees can benefit from it while it does not have any adverse impact on the organisation.
- Extended the years of working: This might not be a completely employee friendly way but it helps them in securing their future. When employees work past their retirement age, the organisation needs to be a little empathetic and not reduce their pay.
- Earning more before retirement: This is another way to secure the future but this largely depends on the employees. The employees can work overtime or work harder to get promoted, which eventually increases their salary. The organisation can help the employees by letting them know the various ways in which the employees can invest, so that it can increase the monthly income.
These ways can only work if the organisation maintains a healthy communication with the employees. The organisation must choose the right program, one that increases the trust of the employees as well as benefits the employees, while keeping the aim and the principles of the organisation in mind. The organisation can arrange for a yearly counselling for the employees or it can choose a one-time event. While these are the two options, and it is completely up to the organisation to choose one, it would be better if it can be conducted every year because the financial scenario never remains stable and it would be better to equip with the knowledge that is required.
The benefits of this financial wellness program is something that benefits both the employees and the employer and investing in this program can never be a waste of time or resources. After all, it is the welfare of the human resources that directs the growth of the organisation.