Benefits are one of the most effective ways of keeping employee engagement within an organization. Structuring the right benefits for the targeted employees based on their expectations is crucial to make your company’s benefits value-adding for employees’ needs. This is why employee loans have become a hot pick for employee benefits by organizations in recent times.
Nowadays, companies lend different types of loans to employees to aid their financial challenges. This can be anywhere from a house loan, car loan, higher-education loan or even a personal loan. But unlike many other benefits, employee loan management comes with careful conditions and processes, depending on the loan type, employee eligibility, legal considerations and much more. This is where benefits management software can simplify employee loan processing for HR professionals. Here is a breakdown of how this is possible.
Just like any other HR software system, a benefits management system is automated. It comes with the ability to pre-set eligibility criteria, rules and other controls related to processing an employee loan. So when necessary data is input, the system will automatically analyze if an individual is eligible for the said loan in one streamlined process, which is efficient and free from errors. This way, HR professionals who process employee loans will not have to cross-check eligibility for every other loan request made by employees nor be vigilant about mistakes taking place. New loan requests, their approval and rejection will be done according to a predefined workflow, which will require significantly less manual input.
Fully-fledged functionality for ESS
A well-thought-out benefits management system will also feature a fully-fledged functionality that supports ESS portals, allowing employees’ direct access and involvement in their loan management process. These ESS portals will also streamline day-to-day actions where an employee can quickly access information such as loan amount settled, the balance repayment, the period left for the completion of loan instalments, and the number of pending instalments etc.- from anywhere and anytime via an easy-to-use interface.
Employees also can request employers to postpone the instalments without any hassle. The admin or the HR professional can then accept or deny these requests, which will instantly inform the employee. This seamless system promotes a highly efficient, clear and transparent loan management process for HR professionals and employees. The instalment deductions from an employee’s payroll are also clearly visible in their payslips, so the transparency is not restricted to the software alone.
Loan management holds a lot of sensitive data, and protecting this is a crucial concern for HR professionals. Besides these, tracking the loan repayment status of employees also calls for data security and effective data management. However, doing this is highly complex, tedious and prone to a high risk of being lost or mishandled in a typical manual loan management setting. It also gives enough room for theft and fraudery.
With benefits management software, these data can be protected with security measures, codes and even facilitates data backups in case of emergencies. These features enable HR professionals to keep all loan management data safe from potential harm.
Produces Managerial Reports
Like any other HCM software, a benefits management system facilitates HR professionals to generate managerial reports related to your company’s loan management structure and procedures. These reports give payroll professionals and, in general, the finance department of an organization valuable information that can be used for future financial decision making. They can also provide a breakdown on what types of loans are opted mainly by employees, stability of repayments and the overall picture of how much a company spends on employee loans as part of their company benefits and the return they receive in terms of productivity and much more.