‘We do not manage our employees’ money’

James Abola 

In Summary

• White collar workers, or corporates as they are called nowadays, face multiple financial challenges.
• Some of the challenges are because of societal money attitudes and others result from them not having the right financial knowledge, attitude and behaviour.

By James Abola

As a new financial literacy service provider, a satisfied client arranged for me to make a pitch to the human resource manager at his place of employment. The lady gave me a few minutes to make my case and replied: “James, we pay our staff when they do their work. How they manage their salary is none of our concerns.”

White collar workers, or corporates as they are called nowadays, face multiple financial challenges. Some of the challenges are because of societal money attitudes and others result from them not having the right financial knowledge, attitude and behaviour.

Money pressures from relatives and friends is a major headache for many salary earners. I have met several clients who complain that although they develop and stick to a budget, it is always disorganised by money demands from relatives and friends. Wedding and funeral contributions are the two biggest reasons for money pressures from relatives and friends.

Recently, the chief executive officer of a foreign owned firm asked me to help the staff in her organisation deal with this particular pressure which was the chief reason given for salary loan applications.

Living beyond your means
Many corporates live beyond their means. Some employers ease the burden by offering salary advances or guaranteeing salary loans.

Overtime, the staff begin taking salary advances as a right and can riot if management tries to stop it. I know an organisation that was delaying by up to six weeks to pay its suppliers because 90 per cent of the staff had got six-month salary advances.

I am happy to note that many human resource managers of today are more supportive to giving financial literacy training and coaching to their staff starting from the time of orientation and going through the contract period up to retirement planning. In turn the organisation benefits from having more productive and trustworthy staff.

James Abola is a business and finance consultant. Email: james.abola@akamaiglobal.co.uk