Promoting employees' financial wellness during difficult times

Sometimes, employees disagree over ideas during board meetings. [Getty Images]

In the face of escalating living expenses and the ongoing introduction of new taxes and levies, the current economic climate in Kenya is becoming increasingly challenging. It is paramount that employers recognise the importance of supporting their employees' financial wellness amidst these circumstances.

In today's fast-paced world, the concept of employee well-being extends far beyond physical health. In Kenya, where financial literacy and economic stability are essential for individual prosperity, the implementation of financial wellness programmes in organisations is gaining traction as a proactive approach to enhancing employee satisfaction and productivity.

Before we delve into the conversation, let me provide you with some eye-opening statistics regarding the financial status of a significant portion of the Kenyan workforce. Over 50 per cent of income earners live paycheck to paycheck, grappling with the challenge of making ends meet amid rising living expenses. Shockingly, more than 65 per cent of regular income earners rely on loans for survival, reflecting a concerning trend of financial dependency. Additionally, retirement poses a looming concern, with over 40 per cent of Kenyans who retire finding themselves living in poverty during their later years. These figures paint a stark picture of the financial landscape for many Kenyan workers, underscoring the critical need for proactive measures to address financial wellness within organizations.

Financial wellness by definition is the overall state of an individual's financial health, encompassing various key aspects such as budgeting, saving, investing, managing debt, and planning for the future. It extends beyond mere paycheck amounts, focusing on how individuals manage their finances to achieve both short-term financial goals and long-term financial security. Budgeting involves effectively allocating income and expenses, while saving entails setting aside money for future needs and goals. Investing plays a crucial role in wealth accumulation, requiring careful consideration of risk and return. Managing debt involves understanding and prioritising debt payments, while planning for the future includes retirement and estate planning. By addressing these aspects, individuals can build a solid foundation for financial wellbeing and pursue a path towards financial freedom and prosperity.

Kenyan employees face numerous financial challenges, including rising living costs, inadequate savings, high levels of debt, and limited access to financial education. The impact of these challenges extends beyond the workplace, affecting employees' overall wellbeing and productivity. Financial stress can lead to absenteeism, reduced performance, and even adverse health effects, highlighting the need for employers to address this issue proactively.

Financial wellness programmes are designed to provide employees with the knowledge, tools, and resources they need to make informed financial decisions and improve their financial literacy. These programmes often include initiatives such as financial education workshops, one-on-one financial coaching sessions, access to financial planning tools, and employee assistance programmes that offer support for financial issues.

For employees, participating in financial wellness programmes can have a transformative impact on their lives. By gaining a better understanding of personal finance principles, employees can effectively manage their money, reduce financial stress, and work towards achieving their financial goals. Improved financial wellbeing can lead to greater job satisfaction, increased focus at work, and enhanced overall quality of life.

Additionally, employers also stand to gain significant benefits from implementing financial wellness programmes in their organisations. A financially healthy workforce is more likely to be engaged, motivated, and productive. Reduced absenteeism and turnover rates can result in cost savings for employers, while improved employee morale can contribute to a positive work culture and employer brand.

As is stands, several organisations in Kenya have already embraced financial wellness programmes as part of their employee benefits package with encouraging results. Companies ranging from multinational corporations to small and medium-sized enterprises have tailored financial wellness initiatives to meet the specific needs of their workforce.

For example, at Jubilee Insurance, we prioritise the financial wellness of our employees by offering Personal Finance Clinics. These clinics provide tailored sessions aimed at empowering our employees with the knowledge and skills necessary to navigate their financial lives effectively.

The sessions cover a range of topics, including budgeting techniques to manage expenses efficiently, strategies for building a robust savings plan, insights into investment opportunities suitable for individual financial goals, effective debt management practices, and comprehensive retirement planning guidance. Through these Personal Finance Clinics, we ensure that our employees have access to the resources and support needed to enhance their financial literacy, make informed decisions, and achieve both short-term financial stability and long-term financial security.

As the awareness of the importance of financial wellness continues to grow, we can expect to see more Kenyan organisations prioritising employee financial wellbeing as part of their strategic HR initiatives. By investing in their employees' financial health, organisations not only demonstrate their commitment to employee welfare but also position themselves for long-term success in an increasingly competitive business environment.