Addressing Debt in the Workplace

“We’re really concerned for the many workers who are waiting to be paid at the end of January...” Question: How do we find the energy and drive to get up on the first Monday of the new year and head back to work?

For some, the first Monday must be regarded as the most depressing. Many will have spent all their money over Christmas (and are possibly further in debt) but they know there’s 4 weeks to go before they even see a thebe for their efforts.

The bright happy memories of the Christmas party are nothing but a dim memory. This is the day the debt stress is surely at its worst.


Morale in the workplace?

As a contrast, at the start of January the bosses and their companies expect staff to be fresh, motivated and ready to go. After all, it’s been a restful festive season – right?


Household debt is a problem

Increasingly frequently over the last few years, financial experts have warned Botswana that ‘household debt’ is a problem.

The International Monetary Fund (IMF) stated last year that the household debt in Botswana was P16.1 billion, with approximately 67 percent of this classified as ‘unsecured’ debt. By the end of the year, after the Christmas spendings, this figure had increased to over P18 billion. This year’s figures have not been released – do you think the problem is getting better or worse?


Is workplace debt a problem?

In your workplace, how many people are in debt? How many will overspend during the holidays?

Does your company pay staff early in December, but then wait till the end of January to pay again? If so, that forces people to go at least 6 weeks between salaries - at the most expensive time of year.

Unless we are educated on how to manage and budget our personal money, the result is huge over-expenditure – possibly leading to a spiralling problem of chronic debt. The simple fact is that a majority of employees are in desperate need of assistance – but are not receiving it. Something urgently needs to be done to assist.

 “Financially stressed workers are less focused, use more sick leave and are more often absent from work”


Employers ask: “How

will this affect business?”

The answer is obvious – in virtually every workplace there is financial stress and there are debt issues. It’s not related to levels of pay.

Debt management education and counselling needs to be introduced into our workplaces. If consumers are educated on debt, credit and borrowing costs before even applying for credit, the statistics would be less shocking, and the problem less huge.


Talking to creditors

Our experience shows that, if a consumer talks openly with their creditors and communicates correctly, they will be more inclined to assist.

Most people (unfortunately because of ignorance or fear), don’t learn and don’t communicate, and so the cycle of debt continues.

Debt management education

The aim of debt management education is to teach individuals all about managing money, focusing on interest rates and debt, and providing real-world solutions about how to get out of debt.

Though this is one of the most advantageous way for employers to relive the stress of their employees, only a minority of companies currently do this – does yours?


Financial wellness

= Physical wellness

We’ve seen many Staff Wellness Campaigns, focusing on fitness, health and HIV education. However, the next crippling epidemic is the one of personal financial crisis.

Offering staff programmes on financial wellness and debt management education is now becoming a critical need in many workplaces.


Why should employers provide financial education?

The selfish reasons that companies should offer debt management part of their wellness objectives becomes clear when one considers the effects that employees’ debt has on business:

1. Financial stress means productivity levels decline (partially due to staff spending work time on issues relating to their debts);

2. Money worries mean absenteeism, absconding and theft increase;

3. Employers lend money out of cashflow, or become debt collectors on behalf of the banks and other credit providers;

Why do staff need financial education?

1. Increased debt means that take-home pay is reduced, in some cases to ‘Zero Net Pay’;

2. Retirement funds are threatened as employees take early retirement to raise money to settle debts;

3. Money stress results in low morale, depression and even suicide;

Companies and employers need urgently to actively address both financial wellness and debt management in the workplace. We know that creates a decent and harmonious working environment, and a mutually beneficial relationship between employer and employee.

Employee financial wellness is vital. Empower your people to achieve financial wellbeing - It’s a necessary business investment.


Author: Cynthia Tsumake – Sales & Marketing Manager with S.C.I. Training (Pty) Ltd. © S.C.I. Training run BOTA accredited financial wellness programmes in Botswana. For help and information contact them on 3180243 or 75114375 or [email protected]

Editor's Comment
What about employees in private sector?

How can this be achieved when there already is little care about the working conditions of those within the private sector employ?For a long time, private sector employees have been neglected by their employers, not because they cannot do better to care for them, but because they take advantage of government's laxity when it comes to protecting and advocating for public sector employees, giving the cue to employers within the private sector...

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