Prevent employees from falling into a debt-trap

The focus of a financial wellness program is often on reducing debt, but another approach can be to help staff avoid debt altogether. Usually, debt reduction solutions lessen the financial burden, but the stress remains. This is where wage streaming is different since it helps staff avoid debt in the first place. 

Wage streaming allows employees to stream some of their earned wages. It is directly deposited into their bank account, assisting them when they need it most to avoid bills and expenses putting them into debt.

An additional focal point of financial wellness programs is financial education and training. Financially literate employees manage their money with more confidence and have a better chance of handling the inevitable ups and downs of their financial lives and how to address any issues that may arise.

This helps employees navigate the pitfalls of debt by creating an understanding of it. This includes the benefits of repaying and avoiding debt. This enables employees to seek out the lowest interest rates when applying for loans and pay off credit card balances each month to avoid interest charges. If they have already accrued such debt, they will be able to select the best methods to get out of debt. 

Financial education will also teach employees to protect themselves from debt and bankruptcy by creating an emergency fund to fall back on when unexpected expenses arise.

Enhance financial wellness within the formally employed

Partnering with financial wellness providers, such as SmartAdvance, allows your company to enhance the financial well-being of your employees by providing a selection of low-risk credit options and financial education/training. 

Due to the ongoing pandemic, there are tremendous challenges within the workplace that frequently affect employee productivity and morale, resulting in financial stress. Fortunately, employers now have the option to minimise the stress of employees. 

Suppose wage streaming does not cover the expenses that confront employees. In that case, SmartAdvance gives employees the option of using low-risk credit by giving them access to our array of financial products:

• Rehabilitation loans – R50 000 over 36 months to provide the means to clear all debt, clear judgements and debt review and lead you to a path of financial freedom.
• Education/Training – Provide training on various financial topics to educate customers and improve financial stability.
• Personal loans – Customers can access safe and affordable finance for up to R30 000 over 30 months for essential expenses.
• Developmental credit – Supporting local communities by building their dream home.

Providing secured payroll deduction loans which significantly reduce employees’ monthly debt

Payroll deduction loans are only available to employees of companies partnered with SmartAdvance. This product aims for over-indebted employees to gain control over their debt and give all employees the relevant tools to manage their money better.

Based on the terms of the agreement employees sign when taking out a loan with SmartAdvance, we submit all necessary information to your company’s HR department to deduct the instalment directly from an employee’s salary and have it paid to SmartAdvance.

Below are the employee benefits of a payroll deduction loan:

• They are protected. By law, an employer has to make sure that debt repayments do not exceed 25% of an employee’s gross pay.
• They save. There are no bank charges involved in a payroll deduction.
• Convenience. Employees don’t have to make any special arrangements to repay their loans – the instalments are deducted automatically. With SmartAdvance sales staff on-site, it is also easy for you to do business with us and have your questions answered and problems resolved.
• Cheaper credit. The agreement between SmartAdvance and an employer guarantees an employee a lower interest rate on their loan.

Below are the employer benefits of a payroll deduction loan:

• Employees who are not worried about money are more productive and less likely to make mistakes and break safety rules.
• Better employer-employee relationships.
• Gaining a reputation as a responsible, caring employer.

Create happier, healthier, and more productive employees

Let’s look at the employee benefits of implementing a financial wellness program throughout your company:

Reduce mental stress

Financial stress results in absenteeism and tardiness amongst employees. Providing employees with the necessary financial products and education can help alleviate this burden. Furthermore, these programs reduce employee stress levels and increase their overall health by providing them with the tools they need to take control of their finances.

Increase in employee satisfaction

Employees who have access to financial wellness programs have reported greater professional satisfaction. Programs let them set and achieve personal financial goals, including building an emergency fund, upgrading their homes, and much more.

An employee prepared for unexpected financial emergencies can engage more at work. This is because they do not have to worry about their long-term finances.

Increase in leave days

Employees who worry about money miss two more days per year than their unstressed colleagues. 

Financial wellness programs offer many free resources to help employees during the workday. Whether it’s financial education classes, career coaching, or benefit programs, financial wellness programs help employees reduce finance-related health symptoms. Instead of sitting in a doctor’s office for long periods, less stressed employees can use their leave days for relaxation and rejuvenation.

It is not only employees that gain benefits from financial wellness programs. Employers do as well, and below are some of the benefits that you as an employer can expect:

Increased productivity

Employees whose financial pressure increased due to the pandemic are more likely to admit that their finances are a distraction at work.

Luckily, financial wellness programs can provide employees with alternatives to stressing over their finances. Financial education courses, benefit funds, and financial aid products can alleviate employees’ money worries. Thereby, productivity increases and your organisation will be able to thrive as you reduce these types of stresses.

Reduce absenteeism

Financial stress results in a 34% increase in absenteeism and tardiness, according to research from Society for Human Resource Management.

Money-related stress can also lead to increased presenteeism; employees come to work despite being physically or mentally unwell. While it may seem less harmful, presenteeism seriously affects organisations and can cost them a lot of money. Companies save on labour expenses when employees aren’t missing work due to their financial stress. 

If you are one of the growing numbers of employers launching financial wellness programs for employees to enhance the bottom line of your company and improve the lives of your employees, get into contact with SmartAdvance to find out how we can get you started.

Email us: [email protected]

Phone us: +27 12 045 0606