International Labour Day is an official public holiday globally as Countries acknowledge and celebrate the role played by workers and labour movement.
There has never been a more critical time than now for employers to celebrate worker’s month by providing their employees with structured wellbeing programmes with a particular focus on financial wellbeing that can ultimately affect the bottom line if not managed effectively says Old Mutual.
Personal and work issues are becoming increasingly inseparable in the present economic climate. These pressures are impacting on the long-term financial health of workers and increasing costs for employers trying to get businesses back to a pre-Covid footing.
Although South Africa is slowly getting back to business, many employees are still suffering from the effects of the Covid-induced economic shocks that have shaken South Africa and the globe. As many grapple with the realities of salary reductions, redundancies, increasing levels of debt and generally having to tackle and manage the increasing cost of living with more limited income streams, employers are being encouraged to understand the impact this state of employee financial stress can have on productivity and the bottom line says Old Mutual.
There is clear evidence relating to the wellbeing of employees and the benefits this can have on businesses trying to operate effectively not just during challenging times.
Due to the escalation of financial challenges heighted by the impact of Covid19, it is more critical than ever for workers to be empowered with basic personal financial management skills and tools to enable them to become more financially literate.
Providing financial wellbeing programmes enables employees to reduce their levels of financial stress and gain more control over their financial lives and this service can be sourced free through collaborating with financial institutions.
“Employee wellbeing has a direct impact on business productivity. Provide workers with support, including financial education and wellbeing programmes contributes to their positive futures and yours” says John Manyike, Head of Financial Education at Old Mutual.
“This kind of pressure has multiple consequences. Worries from home are inevitably transferred into the workplace, and concentration and the ability to work efficiently are compromised. Health problems, depression, aggression and anxiety then surface at work, causing concentration and relationship issues.” says Manyike.
In addition, with an annual absenteeism cost of about R 16 billion to employers in South Africa this clearly has an impact on corporate bottom lines. These include:
- The costs associated with recruiting and training new or additional staff when
- Your best talent resigns to access their pension to settle debt.
- The loss of productivity caused by having ‘stand-in’ labour
- The resentment and ill feeling created when some staff must cover for absentees
- The inevitable decline in morale from teams who see others ‘benefitting’ from ongoing work absences.
- The actual salary costs of sick leave
Add other financial limitations that include ‘presenteeism’ - being at work but not fully contributing- workplace accidents and depression and anxiety, and the gloomy picture is complete.
- According to the latest National Credit Regular Credit Bureau monitor)Out of a population of just over 54 million, 27.4 million use credit. Of these borrowers, 16.8 million have issues and are no longer in good standing in terms of their credit profile.
- Consumers classified in good standing decreased by 220 113 in Q4 2020.
- There were 26 600 disputes lodged on information held on consumer credit records for the last quarter of 2020.
Simply put in terms of the Credit Bureau Monitor issued by NCR , it is clear that thenumbers of financially strained individuals, along with debt levels is growing,
Corporate Financial wellbeing programmes now cannot be separated from the reality of the financial constraints that beset millions of workers and negatively affect their families as well as the employer’s bottom line.