How can Pakistani companies help employees buy their first home?
“Are you a government or a private employee?” is a question commonly asked in social gatherings once you start earning. If your answer is a government job, you are considered a king! And why not? We all know about the facilities and long-term security that comes with a government job.
But if your answer is a private job, you don’t get the same protocol.
There are numerous reasons why people dislike private jobs. For instance:
- There is almost no job security in nearly all private organizations.
- Paid leaves are often not offered in most private organizations.
- The terms and conditions are stringent and sometimes unacceptable regarding pay scale.
These are the reasons why private employees come and go. They move to other organizations as soon as they get better opportunities and facilities than their former job.
So to retain the private employees for a more extended period, raise their working standard, and facilitate them in their basic needs, we have come up with the mind-blowing idea.
Show employees genuine care, and they will be with you for life.
It’s a common observation that employees continue working for the organizations where they receive the most benefits. These benefits could include a bonus, flexible working hours, paid leaves, paid overtime, insurance policies, medical or transportation facilities, or other benefits.
Just think for a moment, what’s the biggest dream of those who belong to the middle or lower-middle class and work hard day in and out to maintain their basic needs? The reason why most people try to save money their whole life? Yes! You have guessed it right, a personal home—a home where a person can live freely without any stress of paying rent every month, enjoy his carefree moments with family, and build beautiful memories for a lifetime. This is the dream of almost every other person who belongs to a low-income group.
As this dream is so glorious, the road to get there is a challenging one, especially in these tough times. Those who belong to the lower-income group can barely make ends meet with their monthly salaries. So, how can they transform their lifelong dream into reality? It’s nearly impossible for them.
Moreover, getting a house loan or a mortgage and constructing a house are hectic processes requiring additional legal documentation and processing. So it would be a great blessing for an employee to get their own home with the help of their employer through a streamlined process. What is more satisfying for an average man who works in a private company than to have the keys handed to his own home?
When the employees see that the organization is helping them get their dream house, which most people spend their whole life working towards, why would they even think to switch their job?
Practical Examples of House Financing
DHA, Bahria Town, Gulberg, Cooperative Officer’s Society, and the Commander City Project are all examples of projects that the organizations themselves have crowdfunded. The outstanding result of their efforts stands in front of us today. These organizations have top-notch infrastructure that meets international standards and is renowned across the world.
Another practical application of this idea can be seen in Faisalabad. Sitara Chemical Industries Limited (SCIL) signed a contract with AMC. AMC is Reall’s partner, which is currently working in Pakistan to supply housing facilities to low-income workers. The installments for the employees’ houses are deducted from their salaries every month. This way, they will be the owner of their own homes without being subject to the stressful homeownership process.
Why is it the right time to adopt this strategy?
- Less Supply than Demand
The population of Pakistan is above 200 million, according to the census carried out in 2017. According to the census, Pakistan’s urban population is 75,584,989, and its rural population is 134,074,288.
Unfortunately, the lifestyle is not of the international standard in our country. Moreover, even the infrastructure of the urban housing is not per international standards.
The number of houses is limited for the country’s increasing population. Pakistan presently needs 9-10 million homes, which is undoubtedly a vast number. When we keep the economy’s fragile state in mind, we can understand that government alone can not provide shelter to such a large portion of the population. So the private sector has to play its part. It is the need of the hour.
- Failure of most of the government schemes
Now and then, we come across the news of new housing schemes initiated by the incumbent government, which go in vain when the next government comes to power and shuns the project. The problems of ordinary people and existing housing problems remain unsolved. So it’s high time that the private companies come forward and bring their employees’ lifelong dream of owning a personal home to life.
- To build trust in the private sector.
Typically, ordinary people have trust issues in the private sector, and it’s generally due to the lack of facilities. If private companies start facilitating their employees’ dreams of owning a house, we can restore the public’s trust in the private sector.
- Beat competitors in business
Nowadays, a decent salary and few bonuses are not enough to keep employees in their current positions. They look for better facilities, and not every private company is ready to think about the well-being of the employees during a time of high inflation.
So in this era of tough competition, any private company can outclass its competitors by giving higher values, the best working standard, and stability to its employees. A loyal and passionate team is necessary to take the business to the next level. Home financing can provide help to a great extent in this regard. This will bind the employees with the company based on the mutual benefit, and create a bond that is not easily breakable.
House financing strategies for private companies to assist their employees so they can build their own homes:
Crowdfunding enables individuals to contribute a specific amount to accumulate a large amount of money for a particular purpose. Nowadays, due to advancements in technology, you can do this quickly via different funding sites on the internet. In this way, the employees can raise funds for their housing scheme themselves. However, the company has to keep the check and balance itself for a smooth fundraising process.
We can see its practical examples in Bahria Town (crowdfunded by Pakistan Navy Employees), Defense Housing Authority (crowdfunded by Pakistan Army employees), Gulberg Islamabad (crowdfunded by Ministry of Interior Employees), and much more. If government organizations can do it, why can’t private companies do it too?
- Guidance for buying a personal home
Private companies can play their part in guiding their employees to buy their own homes along with financial assistance. You can do this by making them attend workshops and providing helpful literary resources on mortgage financing, house buying tips, low down payment options, insurance schemes, saving tips, home grant assistance, etc.
- Financial aid
Financial aid has great importance in the property purchasing process. Private companies can help their employees acquire house loans from banks or other house financing firms by giving them all the necessary documents to apply for assistance. The second option is to provide loans in easy installments. This way, you can deduct a fixed, small amount from the monthly salaries of employees. This approach also helps build trust and ensures a high customer retention rate.
- Shared Appreciation Mortgage
Another way you can help employees get their own home is through Shared Appreciation Mortgage. The process involves the company paying up to 20% – 40% of the total payment of the house, regardless of how high the whole amount might be. However, in this type of agreement, the employee can not sell the house until he gives the balance back to the employer with the appreciation amount.
- Recruiting A real estate lawyer
Private companies can recruit a real estate lawyer to facilitate their employees’ house buying process. The lawyer knows more about property-related processing, so hiring them to help employees is highly beneficial. They can guide on contracts as well as other legal procedures in the best possible way.
Benefits of Housing Schemes for the employees
There are numerous benefits and positive outcomes of the practical application of this idea for the private companies in Pakistan, keeping in view the deteriorating state of the economy, the increasing inflation, and the financial condition of the laymen.
So now we will give you an overview of how this idea can prove to be a game-changer for private companies and private employees in Pakistan.
- Mega discounts on bulk purchasing
It is a rule of business that the discount is guaranteed for anything purchased in the bulk quantity. So if the private companies start giving the employees their own homes, they have to buy a large number of houses or whole housing schemes (in the case of huge organizations). This way, they can get a maximum discount offer from the housing schemes, which is beneficial.
- Pay lower salaries
If a private company adopts the loan lending method, it will be significantly benefitted. The company will deduct some amount from employees’ salaries every month to pay less than the actual salary. This deducted salary will go on a long way as the house loans are considerable, and it will take some time to pay them off. Moreover, there will be no worry of employees switching to other organizations too!
- High employee retention rate
The companies that value their employees, take great care of their needs and provide them assistance to create lasting relationships with them. If an employee’s relationship with the organization is based on mutual trust and respect, the employees stay for an extended period, even for a lifetime!
- Homeownership strengthens employees
The most expensive need in today’s era is a personal house. The employees who are worried about meeting their basic needs cannot perform well at work. A stress-free employee can actively participate in office matters. A company will secure its own time and resources by freeing its employees from the most prominent source of tension in their life.
- The Smart investment for better business
A team of passionate people is mandatory for a smoothly run business. The team should consist of those who can contribute wholeheartedly for the organization’s benefit. This can be achieved only when companies value their employees. The mutual benefits ensure a long-lasting and better work relationship, which helps in speedy business growth.
It can be done via the Naya Pakistan housing facility.
We all know that the current government has initiated a housing scheme for low-income class workers. We can merge the strategy described above with it. The government has asked the private sector for a vacant piece of land to visualize this scheme. Undoubtedly, the approval is given after proper scrutiny. So if any company has clear land, they can easily build a housing scheme for its workers, with the government’s help, at a meager cost.
We hope you enjoyed the ideas mentioned above to help Pakistani companies start a new trend in the Pakistani private sector. This trend undoubtedly has a long-lasting benefit for private employees and the company itself. If your creative mind has any other idea that you think is applicable, do share it with us in the comment section, as your suggestion means a lot to us.
If you are an employer thinking to provide affordable housing to your employees, then call us to get free advice about your project:
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