Indebted employees can have a negative impact on the bottom line of your business. As an entrepreneur, it is in your best interest to start investing in the financial education and wellbeing of your staff and to show them there is life after debt. Here’s how you can start doing it in your business today.
According to a 2015 World Bank report, South Africa consumers are the most indebted people in the world. Across the country, South Africans are taking out personal and micro loans to help pay off their credit cards, retail accounts, or simply to put food on the table and put their children through school. As this cycle continues, people are getting deeper and deeper into debt and most of them have no idea of how to get out.
You may be wondering what this means for you as a business owner. The answer is simple: Indebted employees have a negative impact on the bottom line of your business.
Not only does the stress of troubled personal finances hinder your employees’ job performance, but the burden of debt can also lead to higher staff turnover and increasing requests for pay advances, pay raises, and loans.
With money woes following your employees to work, it is in the best interest of your company to start investing in the financial education and wellbeing of your staff.
Employees are arguably taking more of a risk working for entrepreneurs than for large, established corporations. There are, however, several benefits to working for a small-to-medium enterprise, one of them being that it is easier for you as a business owner to work closely with your team.
This, in turn, makes it easier for you to reach out to your team and to show them that there is life after debt and how to manage their finances better.
Around the world, financial education and wellness programmes for staff are increasingly becoming standard practice at many companies.
Here are some practical ways you as an entrepreneur can start helping your employees get their financial lives back on track.
1Give your team access to online tools
People with debt are often hesitant or ashamed to talk about their debt or to ask for help. There is, however, a way for you as an employer to reach out; send your staff an email with links to online tools and websites they can use to start taking control of their personal finances.
Websites like Kudough can help your employees gauge the state of their debt while online budget calculators can help them determine how to spend and save their money and pay off their debt. By giving your employees access to online tools such as these, you empower them to start rescuing their personal finances themselves.
2Use your internal newsletter
Do you have an internal newsletter that is sent out to your employees? Make use of this existing communication channel to educate your team about debt.
Explain to your staff that there is life after debt, share practical tips on budgeting and saving, and give them the contact details of debt counsellors for them to contact.
3Bring in an expert
If you know many of your employees are struggling under the weight of debt, it might be worth bringing in an expert to talk to your team.
Around pay day, set up a personal-finance workshop for your staff where an expert can give them advice on how to get out of debt and how to budget.
4Make it part of your benefits package for employees
Many companies offer medical aid and provident funds as a part of their employment packages, so why not include debt counselling and financial advice as a built-in benefit for your staff?
Give them the option of easy access to or frequent sessions with a financial adviser or debt counsellor who can help whip their money matters into shape.
When you see an employee struggling with debt, reach out to them and offer to help by connecting them with a debt counsellor or a financial adviser.
One of the great advantages of being a small business owner is that you can have a close relationship with your employees.
By approaching them directly and offering your assistance, you will make them feel that they matter to you and your business – which, in turn, will benefit your company as well.