As an employer, one of your key roles is to help your employees develop their unique strengths and interests within their respective roles. An additional part of prioritising is to assist employees in setting personal financial goals and developing relevant plans to help you and your employees stay focused and on track.

Regularly assisting employees set goals builds their engagement with you as an employer and boosts their productivity.

To reap the rewards of assisting employees, here are some ways employers can help employees create a fully comprehensive budget for 2022 and improve their financial literacy.

Show employees how they can have an impact.

Very few of us can afford a large financial purchase with a once-off payment, nor can we operate in today’s economic climate without keeping our spending in check. For reasons like these, we need to help employees figure out how they can achieve their financial objectives. They can do this by creating a budget (a financial roadmap) to tell them where they started, where they are, and where they are going. 

SmartAdvance informs employees that the budget tells us if we can afford to buy wish list items or if we need that money to cover fixed expenses. It also helps us achieve financial freedom by saving for a financially healthy retirement and helps to prepare for potential emergencies.

Putting a personal budget in place helps create some sense of financial stability and can be implemented by following the below simple steps:

Step 1: Know where you are

It is essential that you write down the following; how much and how often does your money come in, and how often are you spending. The more comprehensive this list is, the more effective your budget will be. 

Step 2: Categories

Both income and expenses can be fixed or variable and regular or irregular. Separate your income and expenses into the respective categories. 

Step 3: Capture

Capture all your Budgeted income and expenses onto a spreadsheet/template. Remember to separate them into fixed, variable, regular and irregular income and expenses.

Step 4: Calculate budgeted amounts

Having the total amount of your income and expenses will enable you to calculate what you will have left or not be able to pay at the end of the budgeted period. This helps you understand what you can or cannot afford, where you can save money and what is happening to your money.

Step 5: Record and monitor actual amounts

Monitor your actual expenses for the period in question. You will need to separate your expenses into various categories at the end of the period to calculate how much you spent. This total is then captured under the actual column on your budget spreadsheet/template.

Step 6: Calculate variance (difference)

Calculate the difference between your budgeted amount and the actual amount for each income and expense category. This difference is called the “variance”. There are only three outcomes to this calculation. You have little to no variance, negative, or positive variance.

Step 7: Update and repeat

Repeat the process the next time.

Employers should refrain from creating goals for employees. They can dictate the objective but not the goal. It’s best if employees come up with the goals themselves.

Help employees reach their goals.

When you partner with SmartAdvance, you assist your employees in setting their budget, and we take them through the process step by step. 

For employees to successfully implement a budget, they must articulate what they hope to achieve with their budget so that we can assist them in setting SMART goals to make creating a successful budget possible. 

Employees need to understand that these goals are for themselves and not solely to improve their productivity at work. Employees need to know what’s in it for them, so we discuss the below with them:

• How the goal impacts them personally.
• How the goal aligns with their passions and career path.
• The knowledge and skills they can develop while pursuing the goal.

Helping them helps you.

Succeeding as an organisation requires business skills, decision-making, and, most importantly, happy employees. Employees need to perform within the organisation and create value. In return, a company should assist them with essential matters such as budgeting and financial wellness. 

Budgeting is one of the essential skills to master. This requires a company to partner with a financial wellness provider that can provide training programs that equip employees with the financial literacy needed to address their changing financial needs. Implementing employee wellness programs that encompass benefits – such as financial training and financial assistance – is excellent for recruitment and employee retention and translates into crucial metrics such as improving productivity and profits.

Not only does it help you improve productivity, but more importantly, it has a positive impact on company morale which has become a central focal point for employers in this post-pandemic world. Employees who have access to financial wellness benefits are more likely to have high confidence than those who don’t. Employers who offer such solutions to their teams have employees who report less stress.

Covid-19 has impacted the way that many employers approach employee wellbeing. Businesses have started to reconsider the importance they place on the financial wellbeing of their employees after the significant financial strain they have been placed under for the past year and a half. Financial wellbeing programs are no longer an added benefit but a necessity for an engaged and productive workforce. 

To put this is context, 89% of employees in South Africa are concerned about their ability to pay their bills. Additionally, 80% of employees are unable to make it to the end of the month. The level of stress these places employees under is monumental and minimizes their ability to prioritise anything other than survival. Ultimately this results in 20% of employee absenteeism being a result of financial stress. Figures like these severely decrease company revenue because of the decline in overall productivity. 

Not having a financial wellness program means as an employer you are spending a significant portion of your workday on time consuming admin. Worse, it means employees do not have access to financial protection and insurance which prevents them from becoming over-indebted and going to unreliable credit providers. Ultimately what this leads to is a workforce that is snowed under by financial stress which adversely affects their productivity. 

Partnering with a financial wellness provider such as SmartAdvance helps you oversee the entire employee wellness journey which includes everything from payroll services to developmental credit.

SmartAdvance provides a holistic employee wellness solution:

Payroll services

Finclusion has recently announced the acquisition of a strategic stake in HelloHR, a South African payroll software startup. What this means for SmartAdvance clients is that they now have access to a holistic financial wellness product. This acquisition grants SmartAdvance clients access to payroll services which includes the automation of the necessary leave and tax adjustments. Meaning that clients save time and reduce the chance of human error.

Wage streaming

This allows employees to access to a small portion of their earned wages at an earlier date. This gives employees a responsible alternative to taking out a loan from a unreliable lender by giving them the more the option of access to their own wages at an affordable flat rate.

Rehabilitation loans

Give employees the opportunity to improve their credit rating by giving them access to rehabilitation loans. They have the option of getting a loan of up to R50 000 over 36 months so that they can improve credit rating and improve monthly savings.

Developmental credit

Your employees have access to developmental credit which helps them build, expand or improve low-cost housing, thereby helping them improve the community in which they find themselves. 

Behind the Scenes

Making all of this possible is the amazing SmartAdvance team that is supported by the Country Head, Gerrie Fourie.

Gerrie spent almost 10 years starting and managing various finance companies throughout Africa. He started his journey with the Finclusion Group in June 2020, ultimately taking on the role of SmartAdvance Country Head in April 2020.

He was brought in to oversee the successful implementation and managing of all SmartAdvance operations. 

Currently he is tasked with aligning the SmartAdvance strategy with that of the Finclusion Group. This strategy alignment is vital as they have recently received funding and now the responsibility is on him to deploy it and guarantee it is dispersed to the necessary departments.

“Business development is a top priority, because we cannot afford to not move forward. Just because we are successful today does not guarantee it tomorrow.”

Forward momentum is also driven by strategic partnerships, which Gerrie helps forge and nurture. 

“If you want to increase your expertise and resources, create predictable revenue streams and provide incremental lift to sales and revenue, all while keeping acquisition costs down then your ability to solidify strategic partnerships is priceless.”

Day-to-day he is responsible for SmartAdvance’s staff management and reporting. Staff management is a lot easier as face-to-face communication is possible once again as more employees are returning to the office as lockdown regulations are eased.

He is trying to ease the transition back to the office by aligning company culture with the long-term goals of employees and SmartAdvance. He has also busy with tech enhancements which will greatly benefit the success of his employees.

If you are ready to looking after the wellbeing of your employees, get in touch with us to discuss partnering with SmartAdvance.