Can your workplace offer you financial assistance?

People who are facing financial difficulties may consider turning to their employers for help, particularly if they have been working at a company for some time.

We investigate what type of assistance companies may offer, and how employees can access this.

Tip: Do you qualify for a personal loan? Find out more here.

Do companies offer loans?

Guy Chennells, head of product at Discovery Employee Benefits, says, “It’s definitely in an employer’s best interest to do what they can to help employees become financially resilient. Such support can reduce employees’ stress due to financial concerns, which makes them less likely to resign and access their pension fund.

“There’s also less ‘do or die’ pressure on wage negotiations, because employees aren’t trying to dig themselves out of debt,” he says.

To address immediate needs, some companies offer payday loans, or direct loans from their own pool of funds. These appeal to employees requiring urgent financial assistance, however, most companies are actively phasing these out, as offering loans isn’t their core business, Chennells says.

“Further, it becomes problematic if the employee leaves the company, or can’t repay the loan for some reason,” he says.

Although payday loans can play a legitimate role if an employee needs bridging finance for a short period, these loans only bring a payday forward, potentially creating a cycle of dependence.

“An employer may be stuck doing the same thing each month going forward,” Chennells cautions.  

Loan repayment arrangements

While loan repayment terms often differ from one company to the next, financial wellness writer Esther Mukumbo notes that a formal, written agreement, including a contingency plan, is an integral component.

“It’s important to have plans and contingencies in place for both employers and employees, in case the employee can’t meet the repayment terms, needs to leave the company, or can’t work for a long period due to maternity leave, sick leave or disability leave.

“Don’t assume – it’s safer for both parties to speak about what would happen if financial obligations cannot be met,” Mukumbo says.

Other ways for companies to assist

While they may not be mandated, depending on company size and resources, there will be employee benefits you can access, says Mukumbo.

“Companies working with pension fund providers often have company trustees or resources offering employee access to a financial adviser,” she says.

“Some large banks offer discounted staff rates to assist their employees with cars or loans. There may even be an option, for example, to sell any extra leave days you’ve accrued. Many companies also offer financial literacy training or bursaries.”

Chennells adds, “Employers can also consider providing employees with access to subsidised or paid-for debt counselling. They can promote financial wellbeing through relevant, engaging communication and the financial products they offer.”

Discovery’s employee benefits span the company’s product ecosystem, Chennells says, and employees’ saving habits, physical activities and psychiatric visits can be tracked. In this way, the company is able to identify potential health- and financial risks, and recommend timely interventions.

The benefits of these initiatives to both employer and employee are many and varied. Reducing risk and improving the wellbeing of employees increases productivity, while employees get referrals for everything from medical treatment to financial coaching and debt counselling.

How to approach your employer

“Your first port of call should be your HR representative,” Mukumbo advises. “They can explain company benefits, as well as any relevant policies and procedures, and can recommend options.

“If you belong to a union, you can also speak to your representative about any financial wellness benefits on offer. Your direct manager may also be in a position to offer advice or a tailored solution, depending on your relationship with them.”

Tip: If you need extra cash, a personal loan is one of the options available to you. Find out more here.