Monday, 6 February, 2023

Scitech Special

Educating staff in financial wellness digitally

Raihan Faiz Osmani

The financial activities have been transformed rapidly in the post corona virus pandemic era as young professionals are moving to digital platforms to deal any task on the go.

To adopt in the transformative society, both employee and employers have option to share knowledge each others to develop themselves in personal finance leveraging digital tools to boost productivity and maintain wellness.

Learning from pandemic - While the conventional wisdom is to sock away six to twelve months’ worth of savings, that became an impossibility for many during the pandemic, as lot of people lost their jobs, small businesses were forced to shutter, and day-to-day living expenses piled up.

The pandemic created a tale of two economies: those who were able to save, and those who struggled to make ends meet. Financial advice remains the same, before and after the pandemic: It’s important to build up an emergency savings fund and create a financial plan. The pandemic also highlighted the need to have a budget, however small it may be. Many racked up debt during the pandemic, while others were able to save.

Employers have bigger role to play - When employees are stressed financially, their health and productivity can both suffer. As I had the opportunity to come across countless organisation in different industry verticals due to my professional journey, in this wide range of scope, I have observed that, employers are also reporting more financial challenges among employees today than five years ago and seeing these challenges are reflecting in the day-to-day operations of their workplace.

However, there was a survey (sample size-975) and FGD (31 nos white-collar young employee) been conducted in 11 companies (RMG, FMCG, NBFI, Manufacturing, ME etc) in Dhaka and Chattogram on ‘financial education for workforce’ by a survey company named quarry and international foundation in 2018.

There we see, more than half of organizations rate their workforce as only a little bit or not at all financially savvy. One in five workers (30 percent blue-collar and 70 percent white-collar) reported feeling extremely stressed, mostly because of their job or finances.

Those reporting high levels of stress were more than four times as likely to suffer from symptoms of fatigue, headaches, depression or other ailments. They were also twice as likely to report poor health overall, leading to more sick days, increased absenteeism and decreased productivity.

“We know financial stress was impacting health and productivity, but we didn’t realise how much,”- said Patwary, managing director at Fujiyama Textiles.

How jobs are affected- When it comes about finances, we all make mistakes and poor decisions, especially in our early career. If we know the common mistakes and ways to prevent them, then we can very efficiently manage our personal finance.

Knowing the pitfalls and their escape will not only help us with our personal finance but will also guide us to have a more secure long term financial success plan. In essence, the term young professional commonly refers to people in their 20s-30s working in any profession or a white-collar occupation. It is a general notion that young professionals who have just started their professional life usually face a lot of challenges in terms of managing their personal finance.

There are essentially two reasons for this including they come to terms with relatively low pay when they’ve just begun working, which becomes challenging to manage. Secondly, it takes a certain amount of time to get a grasp of the real-life expenses and handle them responsibly.

Most young professionals have a feeling that their financial career has just started, and therefore, they have a lot of time to dwell on personal finance decisions and planning.

However, Four out of five employers report that their employees’ personal financial issues are impacting their job performance somewhat,

# An increase in stress among employees (76 percent).

# Workers’ inability to focus at work (60 percent)

# Absenteeism and tardiness (34 percent)

Workplaces are also seeing stress within the ‘sandwich generations’. Over a quarter of employers reported that a significant portion of their workers are challenged by various financial issues like, personal loan settlement, credit card debt trap, sudden emergency incidents for healthcare, supporting children education (sometimes grown), aiding elderly parents and so on.

They hardly could save money for emergency fund. Moreover, could make better personal financial goal and plan for future. They merely have better guidance on how to manage or handle personal financial matters and make better investment for future. 

How employers can help- In order to build awareness among the employee, organization across the industry can take proactive initiatives in collaboration with various fintech companies, subject matter expert whose are working for financial wellness of the community and enterprises, or through technology platform, can provide periodic workshops, training and education programs on ‘personal financial literacy’.

Topics in these initiative may include investments, savings, insurance, budgeting and retirement-focused issues such as retirement plan benefits, preretirement financial planning, retirement plan distributions and retiree health care and so on.

Though the most popular education methods include voluntary classes, projected account balance statements, retirement income calculators, online resources and free personal consultation services are there, debt counseling—whether provided by an independent financial planner, through an employee assistance program or as a service within an employee wellness program—can be a central part of securing an employee’s financial outlook.

Effective counseling often starts by helping employees to clean up the habit of miss using their credit cards, because that waterfall of debt is the absolute enemy of savings. Helping employees to live within a budget and to make a financial plan can take away the stigma and stress associated with financial uncertainty.

Workplace education programs are the most successful when an organization identifies the unique concerns of their workforce and tailors the message to fit that audience. Employers should ask their employee what they want and consider what topics would be the best fit. However, employers may consider several ways to take personalized approaches to reaching their employees.

Reading - There is a dire need for young professionals to organize their personal finances. If we do not have prior knowledge about the financial mistakes one could make, then we end up with a financial mess not for self but also for the family.

Learning about personal finance and practicing it in daily life are much easier than understanding algebra, engineering calculations, coding or putting an injection to an infant. Whatever is our profession, it is important to learn about how to build personal financial wellness and make our living more secured and safe.

Employers certainly have an appreciating role to play from the aspect of great corporate responsibility. Hence, this initiative will not only bring employees' productivity back to the business but also increase their satisfaction level, work engagement and performance for sure.

The good part is, we are seeing few companies have already step up their efforts to integrate financial and emotional well-being, social connectedness, and job satisfaction with their more traditional efforts to support physical health, especially in RMG sector and that to having strategic partnership with some fintech and other development bodies.

I am hopeful, excited and looking forward to see more collaboration and innovative initiatives from the employers of different organization across the industry on these holistic approaches.


Raihan Faiz Osmani is co-founder

and vice-chairman at CODE3