30 January 2023
Succeeding as an organization requires a robust combination of business skills, change management and decision-making, and most importantly, happy employees. Employees need to drive performance and create value for the organization. In return, the ideal enterprise should assist them with what matters the most – budgeting and financial wellness. Especially in an age dominated by millennials.
One of the most important skills to master is budgeting. This would require the HR and finance departments to customize training programs to meet changing needs. Having well-rounded communication with a team is not only excellent for recruitment and retention but also translates well into crucial metrics – improving productivity and profits.
Let’s delve deeper to see how you can help them in the process of preparing and overseeing their financial plans and expenses.
The simplest way to help employees with budgeting is by giving them access to tools and schemes that help them control spending and learn about reliable investment sources. Financial literacy is low at 24% in the country, despite well-developed financial markets. Financial literacy for managing debt or education about decision-making criteria for instruments offering varying interest rates and options is of utmost importance as your employees’ progress and set afoot in asset creation.
With the increase in salary deducted savings and loan products becoming popular, advise them about the tax consequences and long-term effects on credit score. The provision of simplified frameworks on how to approach spending is also helpful. Evidence-based training that teaches the steps to stay on budget and means to direct surpluses can lead your team towards building financial resilience and superior lifestyle choices.
The biggest advantage of credit counseling and debt management sessions is fewer garnishments or advance pay requests and also fewer unexplainable or frequent calls at work. When employees know how to strike the right balance, they would need no time off to deal with exigencies from legal matters that arise from mismanagement. Refer them to reputable sources of assistance such as Fibe, which can offer instant digital salary advance, a Salary card, and instant loan and help your employees escape the complete nightmares caused due to stress and anxiety.
While savings may be a borderline utopian idea for the millennial workforce, it’s essential to reinforce the age-old saying, “money saved is money earned”. Encourage them to save and invest appropriately depending on their risk appetite and age. Meal coupons, employee discount programs, company medical insurance schemes, etc. can help your employees control spendings and get some tax savings too.
With the wave of privatization ever so strong, the cohort that can rely on pensions is shrinking. The YouGov-Mint Millennial Survey revealed that among millennials, only 40%, and among the GenZ, only 17 percent are saving for retirement. The middle-aged working population is struggling to juggle higher education expenses for their children and maintaining a lifestyle. This is a trade-off being made in favor of current consumption over the future.
It’s important to make employees understand this trade-off’s opportunity cost by introducing schemes like the National Pension Scheme in your organization, which can help them with pension and tax savings. It is also important to help your employees understand the tax and inflation-adjusted returns of PPF/ gratuity/ EPF and other schemes.
Make such conversations a part of monthly meet-ups to help employees develop financial discipline. In a society awash with financial instruments, help your employees with effective financial wellbeing communications to make a real difference.
That said a professional financial counselor can provide the necessary support to help your employees with decision-making. Fibe (Formerly EarlySalary) has a stellar track record of powering financial wellness for corporate India by training employees for today’s financial challenges and tomorrow.