Building up life from scratch in Pakistan can be more complicated than it seems. In our cultural context, financial well-being is a natural pressure point. It is also not culturally acceptable to consider the physical, mental, and emotional aspects of our needs.
People accept that food, shelter, and security are our base human needs. We also know that we need to connect with the people around us as humans. We need social interactions to build up relationships. It is only in recent years that mental fitness and mental health are added to the mix of basic needs that need to be catered to.
All of these needs are linked to the state of being financially well-to-do and overall financial fitness.
Financial health is a crucial element of being well, and it has only recently started being acknowledged being a key part of our overall health and well-being. Being able to afford your expenses and household needs is becoming a cause of stress for the average household. Many salaried Pakistanis are finding it difficult to cope with the rising inflation and struggle to meet household expenses every month. Financial Well-being is becoming more crucial with the increasing debt levels, housing and food expenses, and economic insecurity.
What is Financial Well being?
Financial Well-being is defined as the financial health of a person. Financial Well-being determines how people deal with their life’s economics. As a person’s financial wellness improves, so does their quality of life.
Many variables define financial wellness. The most important variable is the life stage at which a person. For example, many people are close to retirement while younger people are in the peak years of their careers. And people that are in their 20s and 30s are just in the initial stages of their journey to reach financial wellness. Every generation has its unique attitude towards money and what it means to attain financial wellness.
To examine your financial wellness, start with these questions:
- Are you ready to deal financially with an emergency?
- How do you feel about money? How does money make you feel?
- Have you set short-term and long-term financial goals?
- Have you made a monthly budget? Do you follow it?
- What is your retirement plan?
When it comes to money, every rupee counts. Getting financial wellness gives people a sense of financial security and freedom. Being financially well-to-do means you do
not have to stress about a sudden emergency like a job loss or career change that would temporarily affect your finances. It can also mean less stress, more free time to spend with family and loved ones, and more clarity about career goals.
However, financial wellness isn’t just about developing a sense of financial freedom and security. Financial Well-being is essential to address our society’s large-scale, complicated inequalities.
Financial Well-being and the Workplace
Employees have to invest a considerable amount of their time and talent in their workplace, but what will they get in return? Ideally not only their salary at the month end. Employees will look deeply at the benefits package they are offered, particularly when evaluating a small business that doesn’t have the capability to provide corporate perks.
Following are five key reasons businesses stand to gain substantial benefits by offering their employee’s group health insurance.
1. Bring in Top Talent
Graduates and seasoned professionals will usually opt for a smaller company for a number of reasons when looking for jobs. For example, they may want to avoid the corporate culture for the time being. They may pick a small business that gives them more exposure to multiple tasks or a smaller team that will let them grow quicker and better.
Whatever the motivation, businesses may lose their edge by not offering a comprehensive benefits package and one that provides sound health insurance. A small group health plan offers more freedom for new employees and ease of mind from health-related stresses. Such plans are usually signed up immediately upon hiring. This means that employees have less to worry about from the start.
2. Retains Employees
Turnover costs are a massive problem for businesses, especially for small firms. The investment of time and money in training new hires means that it is usually worth the expense and effort to retain good employees on the job. Most small business owners claim that offering health benefits like group health coverage helps them hire and retain top talent.
A comprehensive benefits package can be the main selling point for current employees. By offering group health insurance, employers show their teams that they care about their well-being and their families.
3. Savings for The Business
As business owners and managers, we are always happy with any opportunity to save money. Such a possibility is doubly attractive if employees can be made happy through it. A licensed insurance broker will show you in hard numbers how group health insurance plans affect the bottom line of any business.
Not only will the payments for a group health insurance be lower on a per-person basis compared to buying individual coverage on an employee basis, but the money paid by businesses toward employees’ monthly health insurance premiums is usually tax deductible.
4. Tax Benefit
Group health insurance usually means employees have to pay fewer monthly premiums. Since these contributions toward premiums are typically deducted from their pre-tax salary, there is a significant tax saving for eligible staff over time. Employers can deduct part of the premium from their paycheck through a group health insurance plan before deducting taxes. In other words, employers are effectively lessening the taxes each employee needs to pay by reducing their taxable income. The money is deducted to go to the government and is paid towards the long-term insurance benefits of the employee instead.
5. Community Spirit
Improving team spirit and employee engagement involves fostering equality and community spirit. Placing them all under one group health care plan makes sense. Larger businesses usually structure premium payments to deduct more from higher-paid employees and lesser from lower-grade employees to get better coverage benefits without burdening employees. Such one-time efforts allow companies to show employees that they are oriented toward their staff’s financial well-being.
When employees feel that their employers are involved in their health and well-being, they are more engaged. Financial well-being boosts employees’ overall well-being, improving their health and productivity.
As employers, we need to be aware of the financial well-being of our employees, especially lower-tier employees. Measures like group health insurance allow for stress alleviation and improve work focus. This enhances both productivity and business performance. Providing financial and non-financial benefits shows employees that the organization cares about them as people, which inspires loyalty and motivation.
Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.