07. The Role of Human Resources in Enhancing Employee Financial Wellness: Evidence from Sri Lankan Companies


1        Introduction

In order to boost efficiency, the human resources management is responsible for more than just finding the best candidates. The ability of a person to meet all of their present and future financial obligations, feel confident about their financial future, and be able to make decisions that allow them to live life positively is one part of employee wellbeing that is becoming increasingly important. This is known as financial wellness (Kim, et al., 2003). In Sri Lanka, some organizations have recognized the importance of this aspect and are involving HR in improving employee financial wellness. This report highlights such extensive efforts in Sri Lankan companies.

Source (Pierce, 2022)

2        The Importance of Financial Wellness for Employees

Stress associated with finance has an impact on workers' general well-being and productivity at work. Studies reveal that workers experiencing significant financial strain are more susceptible to unscheduled absences and to postponing retirement (Kim & Garman, 2016). In accordance with the findings of Perera and Ajward, (2016), 35% of workers in Sri Lanka experience ongoing stress as a result of monetary issues, which has an effect on their job performance and satisfaction with their work.

(Money and Pension service, 2022)

3        Role of HR in Financial Wellness Enhancement

HR departments play a key role in encouraging financial wellness by creating sensible benefit and wage structures that appropriately acknowledge and compensate workers for their contributions. This provides a sense of security and guarantees the financial stability of all employees (Puncheva-Michelotti, et al., 2016). HR may help establish a financial wellness culture inside the organization by incorporating financial education programs into wellness campaigns (Baker, et al., 2018).

4        Evidence from Sri Lankan Companies

Source (Goswami, 2024) 

Several Sri Lankan companies, recognizing the importance of employee financial wellness, have initiated programs focusing on financial education. For example, Dialog Axiata PLC launched a program providing financial literacy training to employees (Perera & Ajward, 2016). Further, John Keells Holdings PLC includes market-related salaries, performance bonuses, employee share purchase plans, and savings and loan facilities as part of their compensation and benefit policies (John Keells Holdings PLC, 2022). MAS Holdings, which has introduced various programs to boost the financial wellness of its employees. Being the largest textile manufacturer in Sri Lanka, MAS recognizes that better financial health among its workers leads to increased job satisfaction and productivity. For instance, MAS holdings have introduced "Life Matters" program, a flagship sustainability initiative that encompasses financial literacy training, career development programs and retirement planning sessions. It also cater to critical insurance needs and provide salary advances to employees in need (MAS Holdings, 2021).Another major Sri Lankan company, Aitken Spence, has also implemented several measures to enhance employee financial wellness. They have introduced a comprehensive rewards scheme for their employees, which extends beyond simple salary and benefit packages. Employees are also encouraged to participate in highly beneficial stock ownership plans. Furthermore, the employees are also provided with an ample amount of training to help them make informed financial decisions (Aitken Spence, 2018).

5        Conclusion

 Employee financial wellness is a crucial aspect of overall employee wellbeing. The evidence drawn from Sri Lanka suggests that there is significant scope for HR to play a leading role in promoting financial wellness. By incorporating financial literacy and providing security through strong compensation and benefit policies, HR can lead the way in enhancing employee financial wellness.

6        References

Aitken Spence, 2018. Annual Report , Colombo: Aitken Spence.

Baker, T., Kumar, P. & Pandey, N., 2018. Financial Wellness Programs in the Workplace: Employer Motivations, Implementation strategies, and Employees' Use of Program Services. Employee Benefit Research Institute, Issue 470, pp. 2-16.

Goswami, P., 2024. Financial Wellness. [Online]
Available at: https://www.vantagefit.io/blog/financial-wellness-goals/
[Accessed 10 04 2024].

John Keells Holdings PLC, 2022. Annual Report, Colombo: John Keells Holdings PLC.

Kim, J. & Garman, E., 2016. Financial Stress and Absenteeism: An Empirically Derived Model. Financial Counseling and Planning, 14(1), pp. 31-42.

Kim, J., Garman, E. & Sorhaindo, B., 2003. Relationship Among Credit Counseling Clients' Financial Wellbeing, Financial Behaviors, Financial Stressor Events, and Health. Financial Counseling and Planning, 14(2), pp. 75-87.

MAS Holdings, 2021. Life Matters. [Online]
Available at: https://www.masholdings.com/sustainability/empowerment-life-matters.html
[Accessed 11 04 2024].

Money and Pension service, 2022. Why is financial wellbeing important to employers?, s.l.: s.n.

Perera, G. & Ajward, R., 2016. Financial Wellbeing and Performance: A Study with Reference to Microfinance Officers in Sri Lanka. European Journal of Business and Management, 8(30), pp. 44-52.

Pierce, K., 2022. 3 Things To Know About Employee Financial Wellness. [Online]
Available at: https://www.fylehq.com/blog/3-things-to-know-about-employee-financial-wellness
[Accessed 10 04 2024].

Puncheva-Michelotti, P., Michelotti, M., Gahan, P. & Jaehrling, K., 2016. Employer Branding and Corporate Social Responsibility in Five Star Hotels: An Investigation of Employee Perceptions from a Development Country Perspective. Tourism Management, Volume 69, pp. 279-282.

 

 

Comments

  1. Financially established employees wil defineatley contribute in a more productive manner to the organisation.Stratergically monitery investing on employees is fostering to drive the organisation towards accuring the organisation goals.Great work.

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  2. Employee financial wellness plays a role in employee retention , productivity, performance in a company. Hence HRM need to encounter the matter seriously.

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  3. HR can take the lead in improving employee financial wellness by implementing financial literacy and offering security through reliable pay and benefit plans.

    ReplyDelete
  4. Most o us agrees finances are the top cause of stress in our life. There are things organizations can do as leaders elevate the importance of financial wellness to support to overcome this problem.
    Topic selection is good. well explained.

    ReplyDelete
  5. Interesting one. HR can boost employee financial wellness by promoting financial literacy and offering strong compensation and benefits.

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  6. when individuals struggle with their current finances or feel insecure about their financial future. As well as being caused by not having enough income to cover expenses, all of the above elements can underpin financial distress.

    ReplyDelete
  7. I appreciate the practical and effective strategies provided in the post for promoting employee financial wellness, such as offering financial education and counseling, providing competitive compensation and benefits packages, and promoting saving and investment programs.

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  8. Your Blog effectively underscores the pivotal role of HR departments in enhancing employee financial wellness within Sri Lankan companies. By highlighting the importance of financial wellness for overall employee well-being and productivity, you shed light on the significant impact that financial stress can have on workers' job performance. The evidence from leading Sri Lankan companies, underscores the proactive measures taken to address employee financial wellness through financial literacy programs, comprehensive compensation and benefit policies, and innovative initiatives like the 'Life Matters' program. Overall, your analysis provides valuable insights into how HR can drive positive change and foster financial well-being among employees in Sri Lanka.

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  9. Indeed, promoting financial wellness among staff members is a crucial component of their overall well-being, and it's wonderful to see HR stepping up to meet this demand. Employee financial security and peace of mind can be greatly improved by implementing financial literacy programs and providing competitive pay and benefits.

    ReplyDelete
  10. Employee financial wellness is a crucial aspect of overall employee wellbeing. The evidence drawn from Sri Lanka suggests that there is significant scope for HR to play a leading role in promoting financial wellness. By incorporating financial literacy and providing security through strong compensation and benefit policies, HR can lead the way in enhancing employee financial wellness

    ReplyDelete

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