Financial Wellbeing as Brand Incentive
Have you started supporting financial planning for employees? Your Financials explains why this is a good idea.
This article is brought to you by our partner Your Financials.
Your employees drive your business. You make a lot of effort to get the most suitable, appropriately educated, fair-priced and admirable personality to strengthen your team. A competitive package, inspiring work, flexible arrangements. In short: a great place to work. And then a lot of employers consider the rest is up to the employee. Make your own career, take the opportunity when it comes along, educate yourself, be a team player.
Well, for the vast majority this works fine. But we see there are circumstances where life takes a different turn.
Despite your efforts to deliver the best possible and successful effort for the company, sometimes you cannot reap the returns. Companies experience opportunities and difficulties, requiring change in approach, process and also in teams. You can still lose your job even if you do everything right. And if there is no possibility to move into a different position it could end up with losing your employment.
Losing one’s professional occupation is one of the most severe mental blows to endure, says abundant research. The first emotional aspects are comparable to mourning, immediately followed by financial uncertainty. The latter is exacerbated by the combination of the social security system, taxation and possible industry arrangements the employer belongs to, which is complicated for many.
Sometimes disaster hits someone. A really disturbing event, resulting in higher expenses or sudden fluctuations in income. Things can go from bad to worse for no good reason. And when they do people do not all respond in the same way. Scientific research shows that people with money problems show loss of intelligence.
This may result in making professional mistakes. There are situations where a company can afford a mistake, but there are few where the firm can endure it. So it may result in the company repositioning the employee, or ultimately terminating the employment. This often leads to destroying human capital value, also at times where it could be avoided if timely action was taken.
Employers taking responsibility: a win-win
In the case of an employee losing employment financial planning can provide the employee an insight into his financial future, what possibilities there are to manage the change in income and suggest actions. We see several employers providing this service and have witnessed that even employees losing their job continued to provide positive references for the employer.
Some employers provide financial planning to employees to stimulate their financial awareness, actionability and peace of mind. This helps employees staying positively focused on their role in the company. Several collective labor agreements actually stipulate employer funded financial plans every 5 years.
Making financial planning available for employees can be valuable for the firm. The degree of support of employers varies. On the one extreme we see employer funded workshops aimed at creating financial awareness and employees fund the financial plans themselves. On the other extreme employers fund the financial plans (in any case as part of the process of reorganizations resulting in loss of jobs). And there is a lot in-between.
Have you started supporting financial planning for employees?