The Road to Financial Freedom

The Road to Financial Freedom


“From a business threat perspective, financial distress amongst employees can lead to absenteeism, theft, fraud, corruption and ‘presenteeism’ which is when an employee is at work, but completely unproductive, either because they’re using work time to find another job or make extra money, or because they are so stressed about their financial situation that they are completely unproductive,” explains Nigel Willmott, founder of financial wellness company, Motivate Today.

He has five points that every business owner can follow to mitigate the risks associated with this problem.

  1. Make sure you include a credit check in your hiring process. Try to avoid hiring financially distressed individuals where possible. There will be associated issues with such an employee that will impact your business.
  2. Understand what’s happening with your employees. Don’t turn a blind eye to the financial issues they might be having. “This doesn’t mean you should necessarily lend employees money or give them salary advances,” says Willmott. “That can often lead to far greater problems, and it’s not solving the root issue. Instead, education will help your employees take control of their finances themselves, but the first step is recognising that your company as a whole will benefit from a financially well workforce, from upper management right down to wage earners.”
  3. Implement an employee assistance programme. “The best way to handle financial distress – even for law risk employees – is financial education. Start small. Get each employee to work out their income to debt ratio, their net worth, find out if they run a budget and if they’ve accessed a free credit report in the last year. This allows them to evaluate whether they are high, medium or low risk, and to start the path of determining shortfalls.”
  4. Encourage a shift in thinking. South Africa has R1,5 trillion in household debt, largely because our society so easily survives on credit. In most cases through developing the right attitude towards money, implementing a budget and changing the way we view debt, this can be taken under control. “Within one to two years any business can take its workforce from financially distressed to financially free, simply by assisting employees to plan their finances, manage expenditure versus income, limit credit dependency and encourage a culture of saving,” says Willmott.
  5. Follow through. This isn’t a once off. It’s a continuous process that helps people take control of their finances. Don’t make assumptions about who is and isn’t financially distressed in your workplace. Instead, foster a system that allows people to openly evaluate their spending habits (albeit confidentially in terms of figures), and help them put a system in place that demands accountability of actions, but is also supported by the business as a whole. Make it clear that what happens to your employees outside the workplace concerns you. EM

The myth

“If you paid me more, I’d be financially free.”

The reality

Simply earning a higher salary will in most cases not solve a severe debt situation. Financial freedom is not about how much money an individual earns. It’s about how much they have left at the end of the month. And when there isn’t enough left, and that individual has serious money and debt issues, the ramifications will very quickly spread to the workplace.


Getting it right

Willmott offers a range of assistance programmes from one day interventions to a comprehensive eight-month programme.

“These are designed to be short, minimally invasive sessions held on a monthly basis that don’t affect business output and are affordable for all business owners.”

“I’ve never met a business owner who doesn’t know that at least some of their employees are in financial distress. In some cases they offer loans, in others they ignore the fact or believe it doesn’t concern them; in most cases, the results of financial distress, like theft, fraud and absenteeism are dealt with, but not the root cause.

“Financial freedom starts with education. If you can get that right within your organisation, many other bottom line issues will naturally be rectified, and you’ll have a happier, less stressed workforce.”

The Best From the Rest: How important are your employees to you and do they know? Change it here.

Nadine Todd
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.