Financial Wellness – The New Must-Have Employee Benefit
Today's businesses are grappling with a host of ongoing challenges as they navigate a fluid economic environment. Simultaneously, financial concerns loom large as a source of anxiety for employees. Whether it's juggling student loan debts, handling unexpected expenses, saving for their first home, supporting family members, or planning for retirement, personal finance has always been a perennial concern for individuals.?
In recent years, especially in a post-pandemic world, these challenges have been heightened.? Employees are now grappling with the harsh realities of higher cost of living, uneven wage growth, climbing mortgage rates, and lower savings.??
Importantly, these challenges extend beyond employees' personal lives and have significant consequences that extend into the workplace. In a recent 2023 Employee Wellness survey by PwC, financial stress emerged as the leading cause of anxiety among employees. A staggering 60% of full-time employees report experiencing financial stress. The implications of this stress on their work performance are equally alarming, with one in three employees admitting that financial concerns adversely impact engagement and productivity.??
Until recently, the concept of financial wellness was limited to contributions to the employee provident fund and a few compensation-related benefits such as medical insurance. However, these mechanisms were retirement-focused, leaving employees to grapple with their everyday financial challenges independently. Recognizing the strong link between financial well-being and business performance, corporates are proactively implementing measures to address this issue and mitigate the detrimental effects of financial stress.?
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Impact of Financial Stress in the Workplace
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A Holistic Approach to Financial Wellness?
For employees, financial wellness is essential and a primary motivator for their daily commitment to work.?
?Traditionally, financial wellness programs in organizations were often limited to specific groups of employees, such as high-net-worth executives, or offered on a tiered basis based on seniority. However, forward-thinking businesses are prioritizing financial wellness for all in their corporate agendas.??
Today’s workspaces are characterized by a highly diverse workforce with varying gender balances, marital statuses, life goals, and career trajectories. Companies recognize the necessity for a personalized approach to employee financial wellness, acknowledging that there is no longer a one-size-fits-all employee archetype. Accordingly, workplaces have started taking a multifaceted approach that combines investments in technology, products, and education to assist employees in addressing the cost-of-living crisis, making informed financial decisions, and building financial resilience. These steps extend beyond the fundamental obligations of a salary and include:???
Strengthening flexi-benefits???
Forward-thinking businesses are proactively empowering their employees to build financial resilience through the development of flexible benefits programs. Corporates can design programs to cater to the unique life stages and financial aspirations of each employee while offering substantial personal tax savings. By thoughtfully structuring compensation packages and extending flexible benefit options, corporations assist their employees in reducing their personal tax liability.?
When employees opt for a flexible benefits plan, the employer deducts the cost of the plan from their basic pay. Crucially, this deduction occurs before income tax calculations, resulting in employees saving money on taxes and increasing their take-home pay.?
The flexible benefits programs need to be adaptable to meet the varying financial needs of employees, promoting both financial well-being and employee satisfaction. Younger employees, for example, may opt for benefits such as education allowances and fitness, car lease aligning with their current priorities. In contrast, employees in a higher age group, with different financial objectives, could lean towards childcare or health benefits.
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How Zaggle Promotes Financial Wellness Through Personalized Benefits?
The significance of flexible benefits is on the rise, but many organizations are still grappling with complex and outdated infrastructure for benefit design and management. This often results in underutilization of benefits due to employees struggling to understand available options.?
Zaggle collaborates with numerous corporations to simplify and improve adoption of flexi-benefits programs by employees.??
One of the innovations introduced by Zaggle is the digitization of the employee tax benefits program. Zaggle Save, a unified platform integrates an open-loop multi-wallet card, an employee app, and a benefits administration platform.?
Employees can tailor their flexi-benefits benefits to their personal needs, resulting in reduced personal tax liability and increased savings. The benefits are automatically credited to employees’ respective card accounts, streamlining the process that would otherwise require them to submit bills and navigate a complex array of processes and systems including intranet portals and benefits administration interfaces.?
At the backend, Zaggle SAVE simplifies the onboarding of employees, streamlines the process of defining and mapping benefits, and enables the real-time loading of prepaid cards, making the entire experience efficient.?
Salary Accounts and Banking Services?
Zaggle, in partnership with regulated banking institutions, also offers salary accounts to corporates with its SaaS flexi-benefits platforms enabling corporates to extend premium banking services to their employees, further enhancing their financial wellness.
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Digitally empowered money management?
Digital empowerment in money management has become a priority for both employees and the organizations they work for. Each employee's financial situation is unique and while it's influenced by their individual situation, income and spending patterns, there is a common need among employees to become more educated about financial matters and learn how to effectively manage their money. The 2023 PwC Employee Financial Wellness Survey highlights this need, with 74% of employees expressing a desire for assistance with personal finances.?
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To address this need, many organizations are leveraging digital tools to help employees make well-informed financial decisions that align with their specific financial circumstances.? Companies are increasingly offering AI-based tools to extend personalized assistance to employees helping them manage their finances more effectively, plan for various financial scenarios and improve their financial standing.? The ability to access digital tools overcomes any reservations employees might have about discussing their personal financial matters.???
Additionally, organizations are simplifying the process of connecting employees with third-party financial specialists. The assistance spans various aspects of personal finance including managing budgets, identifying opportunities and risks in their financial portfolio, and offering tailored advice to support their unique financial journeys. Zaggle's partnership with financial advisors to conduct financial awareness and wellness workshops for its customers' employees is a prime example, offering guidance on tax and investment options, enhancing financial literacy, and helping employees make well-informed financial decisions.
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Maximize Tax Savings with Taxspanner ?
Zaggle partners with Taxspanner?, enabling individual taxpayers to maximize tax savings through deductions and exemptions, and investments in financial products permissible by organizational policy and taxation laws.? Employees can use TaxOptimizer? to automatically compute tax liability and generate a personalized report outlining tax-saving options.????
A leading multinational company has listed TaxOptimizer? services on its corporate Intranet, allowing employees to engage digitally as well as establish direct contact with financial experts for tax saving and wealth advisory services.??
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Expense cards and spend filtering?
It's a common practice for employees in many corporates to front business expenses, particularly during business travel, effectively making them intermediaries for their organizations. The situation can be challenging, leading to avoidable financial stress and frustration among employees, especially when organizations have extended reimbursement cycles.?
Corporate prepaid and credit cards are a practical solution for businesses to enable employees pay for hotels, meals, and rental cars—as well as have access to cash at ATMs—without using personal funds. Corporates can allocate funds for specific, pre-approved spending categories, complemented by efficient tracking mechanisms that provide insights into what purchases cardholders are making and where they are making them.
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Zaggle Travel and Expense Card?
?Zaggle has introduced the Travel and Expense Card, a collaborative effort with Yes Bank, to eliminate out-of-pocket expenses incurred by employees. In addition to a range of attractive benefits that employees earn such as cashback, and rebates. Corporates gain access to ZatiX, a Software as a Service (SaaS) platform, that provides a comprehensive real-time view of expenses, enhancing transparency and control over corporate spend.
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Extending access to emergency credit?
The increasing cost of living poses significant challenges for many employees, often resulting in financial strain. Many individuals find themselves running out of their monthly salary before the end of the month. Moreover, limited access to credit options often leaves them with no choice but to turn to high-interest loans, which can further worsen their financial stress.?
Zaggle has established a strategic partnership with Fibe to offer a solution aimed at providing employees of its corporate customers with immediate access to credit to effectively manage unexpected financial contingencies. Eligible employees can secure short and medium-term loans based on their monthly salary, company affiliation, and credit score. The entire process is designed to be streamlined and digitalized, ensuring that employees can access the financial support they need within a matter of minutes.???
Incentivizing financial wellness?
To enhance the success of their financial wellness initiatives, businesses can embrace a strategy that incentivizes and rewards employees for reaching personal financial milestones. Gamification can inject an element of fun and engagement into financial goal setting by incorporating activities like contests, and competitions, motivating employees and keeping them actively committed to achieving their financial goals.??
For instance, companies can introduce initiatives such as a "Savings Challenge" where employees are encouraged to cut inessential spending and save a certain amount of money over a designated period. Employees need to establish specific, realistic, and achievable financial goals and openly declare them. The goals can include building an emergency fund, saving for a dream vacation, or achieving other financial milestones, all of which should be measurable. When employees successfully reach these milestones, they are rewarded, further motivating them to stay committed to their financial goals and fostering a culture of financial well-being within the organization.
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Gamification and Financial Fitness?
Businesses can incorporate wellness incentives as an integral component of their employee well-being programs by deploying tools that simplify the process of rolling out schemes and rewarding employees when they offer evidence of attaining milestones on their financial journey. Zaggle Propel, a SaaS-based rewards and recognition platform supports end-to-end campaign management, incentive calculation, rewards management, and efficient disbursement. Additionally, it incorporates gamification principles, enhancing the overall experience for employees and making the pursuit of financial goals more engaging and motivating.
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The Final Word?
The importance of implementing financial wellness initiatives cannot be overstated, especially in the face of the ongoing cost-of-living crisis These initiatives offer substantial benefits to both employees and companies. Employees gain access to enhanced financial support and resources, while companies enjoy a more productive, engaged, and loyal workforce.?
Zaggle, a trusted partner, provides a suite of SaaS-based products that address various aspects of financial well-being.? including Zaggle Save for Flexible Benefits, Zaggle Propel for Financial Incentives, Tax Computing Tools, and Partner Products like credit and premium banking services. The solutions enable businesses to go beyond the basics of meeting salary obligations actively assisting employees in building financial resilience, and promoting their overall well-being and financial security.?
Financial wellness is a critical component of modern workplaces.? Contact Zaggle ( [email protected]) to design financial wellness programs that can benefit your organization and employees alike.