In the present-day economic structure, with a global economic downturn underway, financial stress is the leading cause of anxiety and concern for many employees. This is especially true in Pakistan, as the cost of living escalates. Many employers are now beginning to realize that real support goes beyond the paycheck.
Financial wellness programs are now being introduced to improve employees’ well-being and productivity. Let’s explore why these matter in today’s workplace and how they can be implemented effectively.
What is Financial Wellness?
Financial wellness refers to a person’s overall financial health and ability to manage current and future expenses. This includes preparing for emergencies and saving up for long-term goals, such as university education or retirement plans.
In this context, financial wellness programs are initiatives taken by the employer to help improve employees’ financial situation, manage their debt, and help them plan.
Why Employers Should Care
While several employers are offering traditional benefits like health insurance and retirement plans, a large percentage of the workforce continues to suffer from financial pressures.
Globally and especially in Pakistan, rising inflation, personal debt, and limited financial education mean employees often live on their paychecks, even those earning higher salaries. This frustration shows up at work in the form of decreased productivity, higher absences, and fiercer demands for salary increases.
A global survey in 2023 by PricewaterhouseCoopers revealed that 60% of employees feel that financial stress negatively impacts their work.
Distractions about finances can add up, and they end up affecting employers’ productivity rates. Many financially stressed employees who are distracted at work because of their finances will be less efficient at work. According to the PwC’s 2023 Employee Financial Wellness Survey, they are expected to spend at least three hours or more per week at work dealing with sissues related to their finances.
A majority of employees appreciate getting help with their finances. In especially uncertain economic times, employees need to have access to trustworthy, objective resources that aren’t trying to push sales of their own product or investment plans
Benefits of Financial Wellness Programs
Financial wellness programs can help improve financial planning and management skills as employees learn to be more aware of their finances. As employers, there are several advantages to arranging such programs. These include:
Improved Productivity: Focus and efficiency improve when stress is reduced
Stronger Loyalty: Providing financial education proves that companies care about employees’ health and well-being, not just output.
Better Use of Existing Benefits: Employees often underuse health insurance and other benefits because they don’t fully understand them.
Reduced Financial Emergencies: Requests for salary advances or loans from HR could be reduced by helping employees manage funds.
What do Efficient Financial Wellness Programs Include?
A successful program is more than just a seminar or a single workshop. It needs to be continuous and should adapt to the needs of a diverse workforce. Its agenda may include the following:
Financial Literacy Workshops:
Basics like budgeting, saving, debt management, etc., go a long way, especially for younger employees in the workforce.
Savings and Investment Guidance:
Education on available savings plans and investment basics helps employees think long term.
Access to Financial Advisors:
Providing optional access to certified financial planners, either virtually or physically, helps employees receive personalized financial advice.
Digital Tools:
Platforms that allow employees to track spending and calculate savings goals, etc.
Insurance Literacy:
Awareness about health insurance, group life insurance, and other employer initiatives empowers employees to effectively utilize these benefits.
To learn more about how group life insurance can improve employee and employer dynamics, visit our blog on the Benefits of Group Life Insurance for a Company
Financial Wellness in Pakistan
While this concept is still emerging in Pakistani workplaces, it’s needed now more than ever with rising costs of living, among other issues.
Pakistani finance, tech, and telecom sectors are starting to build programs that support:
Budgeting and savings education
Group insurance awareness
Financial goal planning
Emergency loan programs, along with any financial counselling required
In Pakistan, employer contributions to various employee benefits are often tax-exempt under certain limits, an incentive for businesses to invest in such programs that support employee financial wellness.
How to Launch a Financial Wellness Program
A simple roadmap to get started on such a program should have the following steps:
- Assess Employee Needs:
Start by conducting surveys on important concerns like insurance literacy or debt.
- Start Small:
Begin with the basics, like financial education, workshops on budgeting, etc.
- Collaborate with Experts:
Partner with certified financial advisors and platforms like SmartBenefits.pk for reliable and localized advice.
- Use Existing Benefits:
Highlight how your financial efforts complement your health coverage or insurance offerings.
- Feedback:
Collect feedback to improve the program over time. Financial health metrics can be qualitative (employee feedback) or quantitative (reduced loan requests or absences).
For a more detailed guide, visit our in-depth blog about Employee Wellness Guide for HR in Pakistan
What Financial Wellness Looks Like Practically
Imagine 2 employees, Linta and Usman, at the same company. Linta attends monthly financial wellness sessions, learns how to track expenses, and sets up an emergency fund. Usman, meanwhile, struggles with credit card debt and has to take salary advances to get through the month.
6 months later, Linta feels confident about saving for her goals while Usman is stressed and considering another job with a slightly higher paycheck.
Financial wellness programs don’t just help employees feel better; they empower them to make better career decisions and life choices.
Final Thoughts
Financial wellness programs are no longer a luxury; they’re a strategic investment of a company in its most crucial asset: the workforce. Investing in employee wellness programs of any type can usually lead to reduced absenteeism, better engagement, and ideally higher retention rates.
Happy and healthy employees perform better, experience less burnout, and contribute positively to company culture.
Whether you’re an HR professional, a startup founder, or a business owner, implementing financial wellness is a crucial step toward achieving sustainable growth and fostering a dynamic workplace environment.
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.
