Flexibility in policies is the key to attaining financial resilience, say experts at TechSparks 2021
The latest KPMG reports paint a worrying picture, suggesting 57 percent of employees suffer from financial stress and 37 percent of them end up with some kind of mental illness. The reports also depict that 20 percent of employees call in absent because of finance-related issues, and 18 percent of employees in India have gone ahead and taken high-cost credit from payday loan givers.
To address these issues faced by employees, HR experts from across the industry gathered at a roundtable titled ‘Rethinking employee financial wellness - From financial security to financial resilience’ at YourStory’s TechSparks 2021. Hosted by Arijit Dey, Head of Growth, Strategic Partnerships and Delivery at Refyne India, the roundtable comprised Reetu Raina, Chief Human Resources Officer, Quick Heal; Vinod Bidwaik, Vice President of HR and CHRO at Alfa Laval; and Amit Sharma, Vice President and Head of People & Culture at Volvo.
Understanding financial well-being
Kicking off the discussion on the paradigm shift in ensuring workplace well-being, Reetu observed that the word ‘well-being’ was not used as much as it has been used in the last two years. She said that the pandemic caught us unawares, and the physical boundaries were blurred when it came to working.
“After three months, we noticed a rush from employees asking us to train managers on how to set the norms in the virtual world. I think that was the point where ideas like well-being, creating space, and allowing people to have their own time started coming in,” she said.
Alfa Laval’s Vinod outlined another challenge that employees at his organisation faced. He said that his company was the first company in its region to receive permission to run the factory with limited staff. He added that the response of the employees to the pandemic transformed into panic, which led them to form a committee and start engaging with the people.
“We sought help from the government authorities to convince people about the precautions taken by Alfa Laval. We also started a session with employees’ families about psychological and physical wellness,” he said. Vinod added that they started the ‘Health and Wellness’ initiative in the company where they initiated discussion on how they could ensure general well-being.
Challenges in implementing wellness initiatives
Around 54 percent of the factors that caused stress in employees, according to Amit, are related to financial and money matters. He highlighted how employees at Volvo Group India have paid close attention to health and well-being from multiple angles — social health, mental health and financial health beyond just physical health.
Organisations are now focusing on how they can customise their bouquet of benefits for people based on their life choices and decisions. Emphasising the importance of savings, Amit said that many people focus on living in the present instead of planning for the future, and added that organisations need to focus on educating employees around that.
Revamping employee well-being schemes
The COVID-19 pandemic brought about significant changes in organisational behaviour. Reetu said, “For example, you don’t have to see whether the person is working from 9-6. You change to an outcome-based performance management system.”
She added that organisations have to trust employees and need to have fewer processes than hierarchies. She also said that organisations need to be there for employees for them to deal with uncertainties. As a result, they have to move from regime systems to a system where employees enjoy freedom.
Amit said there were two aspects to revamping well-being schemes — one where organisations make their entire benefits programme flexible, and the other where employees are educated to be more responsible about their finances. He added that the lack of education around the subject has led people to withdraw cash unnecessarily just because it is easily available, thus causing more stress.
How to ensure financial resilience
Data is the key to understanding the spending behaviour of employees, said Vinod. This behaviour helped organisations to determine the character of their employees, and depending on the demography, it can definitely help organisations create programmes around financial wellness.
Amit said that the entire concept of minimum wage being maximum wage needs to be relooked at. “We need to look at wages, not from a minimum wage standpoint, but from a living wage standpoint. Staying compliant with the government’s minimum wage law is one thing, but the larger responsibility towards employees and their living conditions is also an equally important task,” he said.
Backing Amit’s opinions, Vinod said that assessing the workforce’s needs and demands to decide organisational policies was important to keep them flexible. He said, “We cannot have one rule for all employees in an organisation. So it’s important to decide policies depending on demography, positions, and generation.” He added that everyone has different needs, so assessment of employees’ needs, educating them and balancing the two was an important step in ensuring financial resilience.
Reetu said that it was important for flexibility to make an entry into the equation, with the changing concept of employment. Old rules cannot be applied to a new book that operates on a different model with the introduction of a gig economy. “I think it’s time to move from financial well-being to financial resiliency. It means that beneficiaries also take ownership of the flexibility and the liquidity which is given to them,” she concluded.