Building a resilient workforce: How to prevent disruptions caused by financial stress
An employee’s salary is the most practical and accessible financial asset. As businesses continue to go through an evolving landscape , employers and employees alike are challenged to find solutions to match day-to-day needs in order to build a resilient workforce that can maintain productivity. At the People Matters Workforce Productivity Conference, SAVii’s Umesh Sharma, Ivan Matic and Jennifer Simons, discuss the integration of Earned Wage Access combined with credit options and financial education.
Pandemic’s impact on workplaces
Umesh Sharma, Advocate Leader of Employee Financial Wellness at SAVii, discussed how the pandemic has been one of the biggest disruptions that everyone has seen in their lifetimes, especially in India.“On the employee front, we have seen employees in physical & emotional turmoil and the long working hours have disrupted them financially.” This may have had a deep impact on the organisation's productivity.
Ivan Matic, Advocate Leader of Employee Well-being at SAVii, added that in the Philippines, organisations responded in a similar way to disruption. Families were uprooted from their life & times and they were struggling to meet the financial needs of other family members during COVID-19. Many people were either furloughed or put on reduced salary.
Statistics showed that for instance, in the Philippines, more than 65% of the workforce are not able to save even 10% of their salaries.This has led them to resort to loan sharks and all those predatory lenders, putting themselves in the never ending, vicious cycle of debt. All of that caused a lot of financial stress for the employees.
Recent data by the Employee Provident Fund office, said that 68 lakh employees actually depleted their retirement funds. The problem increases when the funds saved for retirement, which are supposed to be an employee's “long term saving instrument, are being used to manage the financial needs of their family, reaffirms the stark issues that everyone faced during the pandemic.
Mental resilience through acute financial education: SAVii’s motto
Ivan shared a situation where in the middle of a pandemic, ‘if 1 out 10 employees asks for financial assistance then the company is able to manage. But what about if there are 1000s of employees in a company and 30% of them ask for assistance? It will drain the company’s emergency funds and severely impact cash flow.’ Thus, with that idea in mind, SAVii was born.
The idea is to offer the employers and employee financial education involving early wages access and credit facility. This will empower both of them to work on a solution regardless of the dire situation they fall in. This also affects the resilience of both employee and employer as the finances are ably managed. This could be an integral part of employee engagement solutions driven by HR Leaders.
How SAVii’s early wage access programme can provide solution to employees
Umesh and Ivan imparted the idea of Early Wage Access by informing how it allows employees to receive funds before their actual payday. In a country like India where the payday system is a monthly cycle, this solution would help the employees at every strata to manage their finances and encourage better day to day money management. Ivan emphasised the process by saying it's just about ‘securing finances when they need it.
SAVii earned wage programme has started to make waves in Philippines for the past 5 years. Companies like Cognizant have been serviced with fast convenience emergency cash solutions in the Philippines. The session concluded with the idea that this long term solution has no cost and liability for employers