Thursday, November 2, 2023
Malaysia Budget 2024: Is it enough to help your employees?
While several subsidies have been introduced in the Budget, Malaysians continue to grapple with financial matters. Are employers willing to shoulder additional responsibility and extend a helping hand?
A recent survey by the Institute of Strategic Analysis and Policy Research revealed that an overwhelming 90% of Malaysians are deeply concerned about the relentless surge in the cost of living. Despite the implementation of several initiatives in Malaysia Budget 2024, including subsidies on vital commodities like cooking oil, chicken, and eggs, the economy is far from stable. Consequently, Malaysians continue to grapple with the daunting task of safeguarding their financial wellbeing.
In light of these circumstances, it begs the crucial question: Are employers willing to shoulder additional responsibility and extend a helping hand?
Detrimental effects of financial instability on organisations
Financial wellbeing forms the foundation of an individual's security. When financial stress infiltrates the workplace, it inevitably leads to decreased productivity. Employees grappling with financial burdens often find it difficult to focus and deliver effectively, and this can have a detrimental effect on their mental health. Studies have shown that financial stress can strain workplace relationships, resulting in low morale.
Furthermore, when employees are mentally absent from work, it ultimately leads to decreased productivity and higher turnover rates. Recognising that employees are the backbone of any organisation, it becomes essential to prioritise their financial wellbeing for seamless business operations.
To address the financial crisis gripping employees by the throat, employers must prioritise financial wellbeing as a fundamental pillar of employee welfare policies. This commitment can manifest through several key initiatives.
Providing financial flexibility
Rather than solely focusing on increasing pay, employers can alleviate financial burdens by offering flexible salary payments. Oftentimes, it’s not actually about how much they are paid, but when they are paid. The concept of 'earned wage access' (EWA) acts as a lifeline for employees by offering them access to a portion of their earned wages before payday.
This not only eases their financial burdens but also safeguards them against high-interest loans and debt.
EWA also serves as a safety net in emergencies, providing financial security during unexpected events, such as medical bills or car repairs.
Reports indicate that Paywatch, a financial wellness solution, has successfully reduced financial stress for over 66% of its users. By partnering with Paywatch, employers can significantly improve their employees' financial wellbeing and reduce turnover rates.
This investment is poised to enhance productivity and the overall effectiveness of the organisation.
Employers can take the lead in fostering open conversations about financial struggles by organising money management seminars, financial education sessions, and financial planning talks. By equipping employees with the necessary knowledge and tools to navigate financial challenges effectively, organisations empower their workforce to make informed financial decisions. Collaborating with partners such as Paywatch and VISA can provide employees with foundational financial education.
Addressing employee financial struggles is not only a responsibility but also an opportunity for employers to enhance productivity, reduce turnover rates, and create a supportive work environment. By prioritising financial wellbeing and implementing initiatives such as providing financial flexibility and offering financial education, organisations can make a tangible difference in the lives of their employees and strengthen the overall effectiveness of the organisation.