Here’s how employees’ financial woes impact work–life and performance, and an easy solution to help them overcome these concerns.
The size of the package doesn’t matter at all. The fact remains, that salary will never be enough. There will always be the need for more. On top of it, there will definitely be times when the need for those few extra bucks will be compelling, such as a serious medical emergency, the wish to take an educational course, or some other unexpected expense at home. Often these situations lead to stress.
Surveys have shown extensive impact of financial stress on worker’s productivity, engagement levels and also on the overall work environment. A 2016 ‘Employee Financial Well-Being Study’ with responses from over 1,200 professionals in India, revealed that 50 per cent of employees rate their level of financial stress as ‘high’.
Additionally, in 2015, PNB MetLife Employee Benefits Trend Study—that covered 323 employers and 2,432 employees split across small and medium enterprises, medium and large Indian corporates and multinational companies—also revealed that employees in India seek benefits that will help provide protection cover in order to help ease their financial concerns. But do organisations pay heed and really provide such solutions or benefits?
Organisations certainly need to give some thought to providing financial security to employees—not just for mishaps or emergencies, but other genuine situations too. These studies prove the point. However, very few organisations have a process in place to assist employees seeking help in times of financial crises, and when done, even that is rather complicated. Moreover, not many organisations are aware that there are small personal loans or digital credit providers such as NIRA, which when in tie-ups with an organisation, make life easy for the employer by providing quick and hassle-free small loans to employees in need.
Workmen commonly seek financial aid from the organisation for various reasons. Companies do have a provision to give small loans to employees. These loans are allowed at a very low interest rate, but only after assessment of their performance, location of the plant they work at, the employee life cycle stage they are in, and so on. However, we have to be wary of some employees who may, at times, try to misuse this policy. Besides, they do not have the wisdom to decide on the loan amount.
Ravi Misra, regional HR head, South Asia and Middle East, Birla Carbon shares that their workmen commonly seek financial aid from the organisation—sometimes to finance their children’s higher education, marriage or a medical emergency. To help out such employees, the Company has a provision to give small loans to employees. These loans are allowed at a very low interest rate, but only after assessment of their performance, location of the plant they work at, the employee life cycle stage they are in, and so on.
Half of India’s employees suffer from financial anxiety, hurting their productivity. Employers can improve employee financial wellness by partnering with NIRA to offer credit as a benefit, improving outcomes for both parties.
“However, we have to be wary of some employees who may, at times, try to misuse this policy. Also, workmen often do not have the wisdom to decide on the loan amount they can really afford. That, in turn, impacts their net take-home income resulting in financial pressures on their family,” he warns. As a responsible organisation, he suggests studying employee behaviour, lifestyle and salary status before deciding on going ahead with any additional financial support.
We try to give advance or small loans to those who may really need them. However, we are not ultimately a bank and hence, we need to do it through external tie-ups.
On the other hand, Vasudha Nandal, VP-human capital management, Sulekha.com believes that financial awareness is the first step to gaining financial security. Therefore, handing out small loans to someone in need is certainly a thing, but their CEO, Satya Prabhakar himself makes efforts to devote some time towards training the workforce on financial awareness, investments and savings.
At the same time, Nandal says, “We try to give advance or small loans to those who may really need them. However, we are not ultimately a bank and hence, we need to do it through external tie-ups.”
Financial crises or a need for funds can arise anywhere, and for any employee working in any organisation, irrespective of size or scale. Nilesh Kumar, vice president-HR, Zivame.com shares that whether or not a company helps out an employee depends on the situation one may be in. “If it is a medical requirement, the death of a kin or a case of relocation, the organisation may help out with a small loan or advance, but not for a generic requirement,” he says.
He shares a case where one of the employees at his company had a medical emergency on a Saturday and reached out for help. “To get the money sanctioned for an employee over a weekend was not easy but was done to help the employee out,” he recalls.
If it is a medical requirement, the death of a kin or a case of relocation, the organisation may help out with a small loan or advance, but not for a generic requirement. However, to get the money sanctioned for an employee over a weekend was not easy but was done to help the employee out.
While this itself speaks a lot about the complications an organisation has to undergo in trying to extend instant financial help to its people in need, Kumar says, “The efforts that go into approving advances or small loans offered internally and the processing involved, are tedious and can be reduced largely through third party tie-ups that may come to rescue as and when someone needs the support.”
In case of a tie-up with a credit benefits provider such as NIRA, both the organisation and the employee stand to gain. The former enjoys reduced risk and process complication in extending financial support to the employee, while the latter can now access credit through a smooth process without the need to explain themselves to their manager.
Fin-tech companies globally are on the rise, and many of them focus on employee financial well-being on the whole. They don’t just offer easy and affordable loans that can be conveniently linked with salary, but also provide financial education to help them save, invest and borrow wisely. These companies play a big role in helping organisations keep a check on employees’ financial concerns.
Fin-tech is growing steadily in India as well. Unlike the US and UK, there are not many employee finance programmes in India yet. However, NIRA in India is a digital credit provider that offers easy loans to employees, enabling more choice and security for employees.
Anyone can simply download the mobile app and apply for a digital credit line. The process is fast and can be done entirely on the phone, avoiding the need for a time consuming paper process. Repayments are made through easy EMIs over a period of up to 12 months. While the user benefits are many, the biggest for those who qualify through a tie-up with the employer enjoy even lower interest rates for the loans.
An organisation that ties-up with NIRA, gets to provide easy and instant credit, as a benefit to its people. It means facilitating financial help for employees, in turn resulting in reduced financial stress and increased satisfaction and productivity. Further, there is no cost to employers for partnering. What follows, is a happy and engaged workforce that knows where to go in times of need for a little more money. Salary may not be enough, but there’s a way out!