While a lot has been said about the role happy customers play in business success stories, we often leave out the vital contribution of happy employees in achieving that same objective.
One of the aspects companies often overlook in their business models is employee well-being, even though employees are just as valuable as customers in determining an organisation’s long-term profitability, if not more so. Ensuring that they remain happy and motivated at work is a key factor in the success of many of the largest companies in the world, with studies clearly showing that highly motivated employees result in greater productivity and growth.
What is employee well-being?
There are various definitions for the term, but for our purposes, let us say that “employee well-being” is about creating an environment that enables employees to achieve their full potentials, benefiting both themselves and their organisations.
One of the key components in creating such an environment is eliminating fears related to wages, a goal Bahrain is addressing through the introduction of the Wage Protection System (WPS). Launched earlier this year by the Labour Market Regulatory Authority (LMRA), the WPS mandates employers to pay wages via bank transfer instead of cash, alerting the government of any wages that have been delayed or unpaid. The system lowers the possibility of employees being taken advantage of by their employers and has made it easier for expatriates to send money to their families abroad, reducing delays.
Benefits of WPS for employers and regulators:
- Motivates employees: Eliminating any fears employees may have of wrongdoing related to their wages is a great motivator. They who feel that their employer is looking out for them will be more flexible to workplace changes, resulting in greater employee retention for the company. This also helps to create a less stressful workplace, leading to lower rates of absenteeism.
- Improves customer experience: Physically and mentally healthy employees are more willing to go beyond the call of duty. In a business that deals directly with customers, this means offering a much more satisfying experience. Thanks to the implementation of WPS, expatriate employees are now much more confident that their families and loved ones will receive their remittances without fail. This has a direct impact on sales, as happier employees translate into healthier organisational performance every time.
- Streamlines wage payments: Replacing physical cash as a form of payment and centralising the transfer of wages through a transparent system has streamlined the wage payment process, resulting in a reduction in labour disputes. Financial transactions are now being recorded every step of the way, providing added assurance for employers and employees alike.
- Highlights the kingdom’s commitment to protect employees: All organisations must abide by WPS regulations. This means that in cases of delays in payments, offending companies are handed certain penalties. For example, they could be denied new work permits until the outstanding payments have been settled. In addition, because WPS records all wage transactions, Bahrain’s regulatory bodies now have access to frequently updated labour data. This will have a positive long-term impact on the reputation of the kingdom, presenting it as a country that cares for its national workforce, which in turn can attract foreign direct investment.
Benefits of WPS for employees:
- Improves job security: Employers who break labour laws will suffer serious penalties if WPS records show that they have failed to pay their employees’ salaries. Likewise, employees are now less likely to feel threatened or be preoccupied with job stability, allowing them to focus on performing their tasks well.
- Protects migrant workers: WPS is playing an important role in helping to enhance the stability of the wage payment process. It is also essential in protecting the rights of migrant workers, especially since a large portion of them are too hesitant to flag payments that were delayed or never received, often waiting several months before filing official complaints.
- Ensures transparency: WPS is built with transparency in mind, particularly as a method of addressing late payments or unpaid wages. This transparency not only solves common problems related to wage payments, but also encourages model behaviour by organisations, making the transfer of payments in full and on time the norm.
The new regulations also encourage financial institutions to innovate. Al Salam Bank-Bahrain, in collaboration with Arab Financial Services, launched the first in Bahrain digital payroll WPS solution, Al Rateb, to offer financial inclusion to the unbanked and underserved while automating payroll processing for employers. The service allows employers to securely upload wages and benefits onto payroll cards through an online portal that is configured with their own payroll system. Cardholders can then withdraw funds at any ATM, make remittances, and use Point of Sale terminals locally or abroad.
In summary, WPS is already enhancing employer-employee relationships, which, in turn, is creating tangible benefits for the economy as a whole. Close co-ordination between private and public sectors, including the key role played by financial institutions, is vital to build a more prosperous future for the kingdom, based on the pillars of trust, transparency, and fairness.
The author is deputy chief executive of Al Salam Bank-Bahrain
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