Shifting focus from enabling credit access to a comprehensive well-being program with credit, savings, insurance, and literacy

Every section of the society is presently working towards minimizing the impact of the Coronavirus pandemic on the economy. While the white-collar employees were able to somehow manage the crisis by using their savings, but the blue-collar workers were left to their meager means, which forced them to migrate back to their hometowns. How can anyone forget the horrific scenes of migrant workers walking in scorching heat for thousands of kilometers with barely anything to eat during their ordeal.

Enabling credit access: Is it really the solution?

Many private employers, have undertaken a slew of measures to help generate employment opportunities for blue-collar workers who have traveled back to their home. They are now announcing steps being taken to bring the workers back from their hometowns. But why is that those who have the resources and the power, are too late to wake up to the issues faced by poor migrant workers. As a matter of fact, even now, most of the initiatives from the private sector entities are focused on enabling access to short term loans for the blue collar workers. Most start-ups in this space are also only focused on making loans easily available for the workers.

While the intentions here might be genuine but merely the availability of easy credit is not a solution to the problems being faced by blue-collar workers. Due to a lack of financial knowledge and understanding, they can end up borrowing more than what they require or might have to serve an exorbitant interest rate. Instead of improving the financial situation, these loans will rather push them towards a debt trap, thereby landing them in financial turmoil. What could be better proof of the shortcomings of a credit-based wellness program than what is being witnessed at present? So, what is the solution to the financial problems being faced by blue-collar workers? Well, the answer indicates the need for a comprehensive wellness program.

Comprehensive wellness program: The need of the hour

The ongoing crisis has laid bare the fallacies of any wellness program aimed at enabling easy access to credit. As a matter of fact, merely providing the (largely-uneducated) workers with access to loans is a recipe for disaster. Their lack of financial literacy might lead them to make unwise decisions, which can further aggravate their problems. This is why the employers need to focus on creating a comprehensive wellness plan that addresses most of the issues faced by blue-collar workers.

Following are some of the essential features that must be incorporated in a comprehensive wellness package for it to hold some meaningful significance in the lives of the blue-collar employees: –

Financial literacy

First and foremost, there is an urgent need to impart financial education to the blue-collar workers. As most of these workers have no or simply basic education, they are not in a position to make sound financial decisions. As a matter of fact, they prefer keeping the money as cash with themselves when it could earn interest just sitting in their bank account. Imparting financial literacy will help them become self-sufficient while making any investment decisions. This motive can be achieved by employers conducting regular workshops to acquaint the workers with essential financial aspects. Moreover, employers can also enter into agreements with financial experts to provide the necessary skills to their employees remotely.

Inculcate the habit of savings

Another essential feature of a comprehensive wellness package is to encourage the habit of savings. The present situation of the migrant workers in the country could have been much different if these workers had some savings in their bank accounts. The hand to mouth style of living is not something that anyone aspires for. Thus, it is essential that the employers inculcate the habit of savings in their workers. This can be achieved by undertaking several simple initiatives like signing them up for a zero-balance savings bank account/salary account, auto-debit of a certain sum every month from their account balance into a risk-free investment scheme, arranging a session with financial experts to help them identify good opportunities, etc.

Health insurance and life insurance

The rising cost of medical treatment in present times can wipe out the savings of anyone in a matter of days. That is why having a comprehensive health insurance policy as a part of the wellness package is mandatory. When the workers know that their family’s health is being taken care of and they will receive good treatment for their ailments, they are more motivated and are better focussed while working. Along with health insurance, a life insurance policy is also much desirable as it offers financial security to their families in case of untimely death.

Retirement benefits

A comprehensive wellness package must also take care of the retired life of the workers. Nobody wants to work in old age, but financial problems force them to. By taking care of their financial and healthcare needs post-retirement, employers can easily earn the loyalty of the employees. Retirement benefits can be in the form of pension, access to healthcare facilities, gratuity, provident fund, etc.

By shifting the focus of wellness packages from easy access to credit to the overall wellness of the workers, a repeat of scenes witnessed during the pandemic can be effectively avoided.

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