Financial Wellness: Metrics to Monitor Financial Planning

As the new normal has finally set-in and industrial production is slowly returning to normalcy, it is time for companies to pay attention to the financial wellness of their workers. The blue-collar workers were the worst affected by the extended nationwide lockdown. Their complete absence of financial literacy and awareness was brutally exposed during the testing period. Numerous gut-wrenching stories of blue-collar workers and labourers dying during the long walk back to native villages came into light. Now, it is extremely important on the part of the employers to take care of the financial wellness of their workers and empower them with financial literacy to rule out any chances of these instances taking place ever again.

Financial Wellness: A dynamic concept

What makes tracking and measuring financial wellness tricky is the fact that it varies according to individuals. While for someone owning a house might be a sign of financial well-being, for someone else having money in the bank account might be the financial goal. But when it comes to blue-collar workers, tracking their financial wellness is extremely tricky. Lack of information or rather reluctance to share information is the biggest impediment that employers face. Due to inadequate information being available, it becomes extremely difficult for companies to develop comprehensive financial wellness programs for blue-collar workers. In such a situation, the best option available is to look at the key financial wellness indicators of individual workers and formulate a plan accordingly.

Financial Wellness: Key Performance Indicators

One of the best sources of information for employers pertaining to the financial well-being of the workers is monitoring the various key indicators. Every company has certain financial support programs available for their workers; by monitoring these programs, employers can acquire crucial information required to optimise the financial wellness packages for their blue-collar employees. Here are some of the key performance indicators that employers should monitor regularly: –

Participation in savings programs

Employers need to monitor the participation of the workers in the savings program developed by the company. The money deposited by the labourer in the program is a clear indicator of his/her financial wellness. Higher is the money deposited by the individual every month or quarter; better is his/her financial wellness. An individual will be saving more money only if he/she has spare funds to do so. If the amount saved by the worker is declining or is irregular, it is an indicator of a precarious financial situation. Thus necessitating intervention by the management.

Insurance coverage

Needless to say, comprehensive insurance coverage is a key indicator of financial wellness. In the present uncertain times, having adequate insurance coverage is extremely crucial. Whether it be health insurance, life insurance, or any other type of insurance, every blue-collar worker must have adequate insurance coverage to protect his/her financial independence. Employers should ensure that the workers are covered under optimal insurance plans at all times. If any individual has been left unprotected from insurance coverage, he/she must be covered under the same as soon as possible.

Frequency of borrowing

Many companies offer the facility of short-term loans or advance against salary for its blue-collar workers. This facility can be used to effectively monitor the financial well-being of the workers. If the frequency of micro-loans being availed by the workers has been increasing, it indicates a precarious financial situation of the individual. In such a situation, the relevant department must make a timely intervention and guide the worker through the financial quagmire.

PF withdrawals

Provident Fund is supposed to cater to the financial requirements of individuals post-retirement. Though, individuals can avail a loan or make withdrawals from the provident fund in case of urgent situations. If any worker(s) in the company is placing frequent requests for withdrawal from the provident fund, it means that their finances are not in perfect health. Management must offer them guidance and advice during such situations.

Engagement with the education programs

As part of a financial wellness program, companies undertake various communication and education initiatives pertaining to the finances of the workers. The level of engagement that the workers exhibit with such initiatives should also be tracked. If any individual worker is not following the financial education program, then he/she must be counselled and motivated accordingly.

Personal counselling queries

Organisations should also monitor the activeness with which the workers are raising personal counselling queries with the financial consultant. Workers should be encouraged to ask as many questions that they can; so that they acquire all the necessary information before making a financial decision.

Ensuring the financial independence and well-being of the workers is an on-going exercise. Companies need to monitor their performance and progress regularly and make timely interventions as and when necessary.

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