How Can We Encourage Lower Grade Employees to Save Without Relying on Advances?

I often notice that many times a good worker approaches you for financial help for one reason or another. There may be genuine reasons too, but if we give advances, they find it an easy way of getting the money whenever they want. I do acknowledge their financial difficulties, but when they are explained to save a little money for their rainy days, they expect the employer to do the needful.

Through this discussion, I want to know from the forum about any good scheme where an employee can inculcate the habit of saving and helping each other, rather than looking to the employer who, most of the time, turns down their request due to the misuse of the facility.

You do have a good point regarding the way to enable employees to realize the value of whatever help they get—be it from the employer, friends, or others. Going by your posting, I guess you are their employer. In which case, I suggest making it sort of mandatory to deduct some money (however nominal it may be) from their salaries—apart from their PF, etc., which are statutory—and open FDs with your bank where you have your company account. So, in a way, whenever they need extra cash to handle exigencies, they can access the money (with interest), and at the same time, you will be inculcating the saving habit in them. To begin with, the amount being saved shouldn't matter. With some modifications to suit your exact situation, this should work.

All the Best.

Regards, TS

Next time, when you conduct their salary hike, start a simple scheme called a "voluntary benefit fund" and have a small component saved from their raise in the fund. This can be accounted for in a bank account under the director's authority. When needed, a part can be funded as an interest-free loan to the employee with an additional assurance to clear the loan. This will not be a burden to the company. During the employee's retirement, they can be entitled to the amount they saved during their employment.