Employee Financial Wellbeing Linked to Profitability

by PNG Business News - March 15, 2021

Did you know that employee ‘money worries’ associated with poor financial wellbeing can negatively impact business profitability?  Financial literacy training is a relatively easy and cost-effective solution to improving employee financial wellbeing and thus mitigating the negative effects of ‘financially stressed’ staff.  Helping your employees access responsible loan products – some of which are now available in PNG via new and ethical personal lending start-ups – also has a role to play in their financial wellbeing.

The effects of financial stress and poor financial wellbeing on employees can be as great as physical sickness. Many employees admit that they spend several hours each week dealing with financial issues while at work. A 2020 survey by PwC revealed ‘money worries’ to be the biggest cause of employee stress and that the stress is a major distraction at work.  It is estimated that over 80 percent of the PNG workforce is experiencing some level of financial stress.

 

How Does Poor Employee Financial Wellbeing Impact Business Profitability?

Financial wellbeing is closely linked to financial stress.  It is estimated that employee financial stress is costing Australian businesses $31.1 billion annually.  Whilst specific data does not exist for PNG businesses, we estimate it to be high.  We also know that financial stress takes a toll on employees’ health—both mentally and physically – as well as on business health. 

Employee financial stress contributes to increased absenteeism, lower quality work output, decreased productivity, increased staff turnover and associated recruitment and training costs, as well as even workplace theft.  Studies show that employee financial stress is costing businesses up to 19% of their payroll costs! A financially stressed workforce is therefore bad for the bottom line. 

 

What exactly is financial wellbeing?

Financial Literacy Australia defines financial wellbeing as when you are:

  • able to meet expenses and have some money left over;
  • in control of your finances; and
  • feeling financially secure, now and in the future.

Financial literacy, that is, a personal’s ability to understand and effectively use various financial skills such as saving, budgeting, investing and responsible borrowing, underpins financial wellbeing.

 

The business solution

Financial literacy is key to reducing financial stress and improving financial wellbeing.  Providing employees with financial literacy education is also part of being a socially responsible employer as well as an employer of choice. 

Significantly – and especially in PNG’s current economic climate – equipping staff with the right skills to understand and competently manage their personal finances will also impact positively on your bottom line.   

 

Solomon islands business – financial literacy success story

In neighbouring Solomon Islands, food manufacturing company SolTuna (one of the country’s largest employers) significantly cut staff absenteeism and consequently improved productivity, increased revenue, and cut costs largely via a financial literacy program. 

Prior to receiving financial literacy education many staff were taking days off work because they couldn’t adequately manage their pay to last them from one pay cycle to the next.  Absentee staff were raising additional money in other ways such as selling produce at local markets in order to make ends meet. On fortnightly paydays, many workers would head to the bank or the market instead of the workplace when their pay checks are deposited to do some much-needed shopping or pay off creditors. 

Overall, the program was considered a great success by not just SolTuna but also by its employees.

 

Additional ways to improve employee financial wellbeing

There are other ways in which employers can facilitate the financial wellbeing of their employees in addition to providing them with financial literacy education.

  • A good benefits package is a must. Performance incentives in the shape of bonuses, and clarity about pay bands are a great starting point.
  • Offer competitive salaries. This one might sound obvious—and expensive—but, it is worth the effort.
  • Give employees time off (or flexible work schedules) to allow them to put their finances in order – be it visiting the bank to set up internet banking or to pay out a high interest loan.
  • Incorporate financial advisers in to your broader wellness or employee assistance program.
  • Assist employees with their tax returns.
  • Even understanding payslips can be complex for some employees—helping employees to understand their payslips can reduce the burden of stress.
  • Encourage (and better still, facilitate) responsible borrowing – especially personal lending which in PNG, can attract interest rates of up to 50 percent per fortnight! 

 

Facilitating responsible borrowing

Access to affordable credit is a right not available to the majority of PNG employees.  As such, and in combination with poor financial literacy, staff often turn to unethical ‘pay-day street lenders’.  Street lenders typically charge extremely high interest rates (up to 1000 percent per annum) and often ‘over lend’ exacerbating and perpetuating unsustainable debt burdens.

Many PNG businesses offer in-house employee loans to mitigate the risks posed by unethical pay day lenders.  However, the administrative burden of managing loan books can be high.  An alternative is now available via personal lending start up – Savi Moni.

 

Responsible lender offers financial literacy education

Newcomer to the PNG Lending market, Savi Moni’s personal loan solution was developed to help corporate sector employees take control of their finances and enjoy financial wellbeing whilst simultaneously reducing the negative business impact of financially stressed employees.

“We want to give employers and employees a beneficial staff lending solution that incorporates financial literacy to help avoid future financial stress” says Founder, Nick Keane.  Born and bred in PNG and with several in-country business experiences, Nick understands the problems that staff loans cause for businesses as well as the financial stress generated for many PNG households.  He is passionate about creating an improved sustainable solution.

Financial literacy education is a central component of the Savi Moni loan product, with a PNG specific formal ‘family money management’ workplace training, delivered by Australian Business Volunteers (ABV) available to interested employers. The training has been developed specifically to suit the PNG context and to help families strengthen skills in planning and saving for the future, as well as seeking advice about money and finance. 

Savi Moni’s financial literacy education offers a gender inclusive approach, encouraging men and women from family groups to participate collaboratively.   In addition, Savi Moni offers ‘Moni Savi’ - a range of free resources and tools on their website, targeting for both employers and employees to help improve financial literacy and reduce financial stress.

 

Summary

Improved financial literacy in combination with responsible borrowing contributes significantly to employee financial wellbeing and helps mitigate the negative business impacts of a financially stressed workforce.  There is a clear business and social case for supporting employees’ financial wellbeing and for partnering with responsible personal lending services such as Savi Moni – which has financial literacy education firmly embedded in its loan products.  To learn more:  www.savimonipng.com.



Recent Articles

Mining

PNG Business News - September 16, 2021

Engaging the global crowd to design the electric mine of the future

Today, the Electric Mine Consortium (EMC) launched the ‘Electric Mine Simulation’ crowd challenge in partnership with the OZ Minerals Think & Act Differently ideas incubator and Unearthed. OZ Minerals, IGO, South 32, Blackstone Minerals, Evolution Mining, Barminco and Goldfields have committed to significantly reducing their carbon footprint. These seven mining companies along with a number of partner companies, have come together to form the Electric Mine Consortium, a collaborative group seeking to accelerate progress towards a fully electrified zero carbon and zero particulates mine.  Electrification of mine sites is a critical step change needed for the mining industry to achieve a zero carbon future. Switching to electric and renewable energy represents a transformational shift that will change the way mines are designed. This challenge is about using simulation to understand the impacts of electrification on mine design and through this challenge the EMC is looking to find innovators that can help do this.  The eight-week online challenge invites companies and individuals from around the world to propose an approach to designing an open architecture, mine design simulation platform that can initially be used to compare a fully electric underground mine with its traditional diesel powered equivalent. Brett Triffett, Transformation Technologist, from OZ Minerals explained, “there is a great opportunity to use whole-of-mine simulations that integrate all of the dependent systems so we can understand the holistic value in transitioning from diesel to electric solutions in underground mines.  We would like to be able to quickly build and test different mine designs and compare things like productivity, costs, emissions and energy requirements. We think that eventually this capability could be expanded to include the entire mining value chain. We have invited the crowd to propose solutions because we are not currently aware of a platform that meets this brief.  What we have learned from running previous crowd challenges is that there are often people from outside our industry who have ideas or technology that can be applied to mining. These people are often unknown to us and in many cases they are unfamiliar with our industry.  By participating in a crowd challenge, innovators can access a new market and be supported in developing new products and business models.”. A selected cohort from from this challenge will join the Think & Act Differently incubator and be supported in developing a demonstration of their solution.  The incubator program is a supportive environment that includes; funding, mentoring, opportunities for collaboration, capability uplift and exposure to mining data and mining operations from across the EMC members.

Company

PNG Business News - September 15, 2021

Weir Minerals strengthens its partnership with international technology group, Andritz

Weir Minerals and Andritz have signed an agreement at MINExpo 2021 expanding their shared commitment and strategic cooperation to supply equipment for processing tailings in the mining industry. The foundations of this agreement have been built on a shared understanding and vision to enable the sustainable and efficient delivery of the natural resources essential to create a better future for the world. Since 2018, Weir Minerals’ and Andritz’s partnership has seen them collaborate on joint tailings projects. This shared history as partners – a collaboration made stronger by the quality of individuals on both teams – has reinforced their abiding belief that together, both Weir Minerals and Andritz are stronger. This shared success has led both Weir Minerals and Andritz to renew their on-going commitment and announce they’ll be expanding their offer to all regions around the globe.   Utilising Andritz’s proven separation and dewatering technologies, Weir Minerals has strengthened its whole-of-mine capabilities, showcasing market-leading products from extraction to comminution, mill circuit and tailings management. ‘Weir Minerals has been providing tailings solutions for decades; we have dedicated research facilities – the Weir Technical Centre in Melbourne, Australia and the Sustainable Mining Centre in Venlo, Netherlands – that are challenging conventional ways of thinking about tailings, while also developing practical, innovative and sustainable solutions that will reduce operating costs and improve safety,’ Ricardo Garib, Weir Minerals Division President said. ‘Decreasing ore grades mean that mines are producing more tailings than ever before. One of the challenges with tailings management is that there cannot be a one-size-fits-all approach; each mine requires a tailored solution that carefully considers the minerals being processed, as well as the site’s climatic and geological conditions. Weir Minerals prides itself on having both the expertise and equipment that allows us to partner with miners everywhere to plan and implement tailings solutions based on their operations’ unique challenges and this agreement with Andritz enhances those capabilities,’ he said. ‘Andritz has a long history working across a range of different industries. We are very proud of the work we’ve done with Weir Minerals; together, we’re excited about continuing to provide a joint offering of sustainable and value-added tailings solutions. Both companies bring a different expertise and know-how to the partnership; we complement one another and ultimately it’s our customers who’ll benefit,’ Steve Huff, President Andritz Separation said. Tailings management forms an important element of Weir Minerals’ broader integrated solutions approach, which considers problems and challenges from all perspective and draws on a range of experts – process engineers, design engineers, product experts and materials scientists, among others – to identify potential challenges and opportunities and provide tailored solutions. ‘This latest agreement enhances our overall tailings offering and enables us to provide our customers with a complete tailings solution. Under the brand name IsoDry, we will continue to offer customers a range of mechanical separation technologies, such as thickeners, filter presses, centrifuges, and vacuum belt filters,’ Charlie Stone, Weir Minerals VP Sales and Business Development-Mill Circuit said. Weir Minerals has strengthened its tailings team to support the market and ensure that it can provide innovative solutions based on each customer’s specific requirements. The agreement provides the opportunity for potential future collaboration on technology, harnessing Andritz’s market-leading separation technology in conjunction with Weir Minerals’ minerals and tailings processing technology. Many of these products – Warman® pumps to transport fluid tailings, GEHO® pumps to handle paste, Cavex® hydrocyclones to dewater tailings and the Multiflo® range of dewatering solutions – have been integral to helping miners manage their waste for generations. Weir Minerals and Andritz have also reiterated their shared commitment to sustainability; it is an essential part of both their business and corporate strategies. Both companies have outlined ambitious plans to reduce their carbon emissions, while their approach to ESG initiatives extends to all aspects of their organisations.  ‘Shareholders and stakeholders are rightfully demanding more sustainable mining practices and tailings management is an area where there’s a lot of scope for improvement. Weir Minerals wants to play a central role in changing how the industry thinks about and manages tailings. Ultimately, we believe that sustainable solutions are not only environmentally beneficial, but also reduce operating costs and minimise risk,’ David Almond, Weir Minerals Global Director, Product Management Process said.  ‘Weir strives to make our customers more sustainable and efficient; it’s core to our purpose and at the heart of what we do. We believe that embedding sustainability throughout our organisation protects and creates long-term value for our stakeholders and secures the long-term future of Weir. Our approach to tailings management is an extension of our broader corporate strategy. There is scope to make long-lasting, impactful change in how the mining sector thinks about and manages tailings and Weir is proud to be one of the industry leaders,’ Jon Stanton, Weir Group Chief Executive said. 

Business

PNG Business News - September 15, 2021

STAKEHOLDERS VIEWS CRITICAL FOR BETTER RESOURCE GOVERNANCE: ALKAN

Head of the PNGEITI Mr Lucas Alkan last week in Wabag at the opening of the consultation. The Head of the PNG Extractive Industries Transparency Initiative (EITI) Mr. Lucas Alkan has issued a strong challenge to stakeholders in the extractive industries to embrace and promote the work of EITI in Papua New Guinea to derive best value from the industry. Mr. Alkan spoke of this last week in Wabag when he opened the upper highlands regional consultation on a proposed law to transition the PNGEITI into a statutory authority.  “PNG EITI is a government driven initiative to promote transparency and accountability in the PNG mining and petroleum space which has been driving the PNG economy for a sustained period of time. “But there is this misconception about proceeds from mining and petroleum activities not being translated well into development on the ground and this sentiment is shared by many at both the provincial and national level. “What PNGEITI is doing is to shed light on the leakages on revenues and proceeds from the mining and petroleum activities with the ultimate aim of improving governance in the mining and petroleum sectors using international best practice standards to see the desired development outcome from this important sector. “Seven years into PNGEITI implementation in PNG, we’ve now seen the need to make the PNGEITI administrative body, the PNGEITI into a statutory body to see more improvement in the EITI reports to enhance good governance in the sector to derive the best development outcome.   “We’ve covered two regions; the New Guinea Islands and Momase regions and we are now conducting consultations in Enga and Eastern Highalnds to cover the big highlands region. “I encourage the best knowledge and views from all stakeholders from the stakeholders in these consultations so that we give birth to a law that truly reflects the genuine views of all stakeholders for better development outcomes. A State Technical working group comprising the Department of Petroleum, State Solicitor, Internal Revenue Commission, Department of Personnel Management, Department of Treasury, the National Economic Fiscal Commission and Department of Finance were in the Enga capital, Wabag for a four days consultation for the Upper Highlands region” “PNGEITI has been in operations since 2014 effected by a NEC decision and now we are moving into the next step in anchoring this extractive industry reporting process into PNG’s legal and administrative system. PNGEITI published 7 reports detailing activities taking placing inn the PNG mining and petroleum space,” Mr. Alkan said.   Article Courtesy of PNG Extractive Industries Transparency Initiative

Join Papua New Guinea's

Business Community

Be the "First" to get our exclusive Digital Magazine & Weekly Newsletter.