Debt and employee well-being and performance

And poverty does not stop at the very bottom. The number of employed South Africans who remain in poverty is high, as recent research using data from the National Income Dynamics Study (NIDS) has shown that up to 20% of workers are not earning a wage that could place them in an income group above the poverty line. This often results in taking on debt for many — adding to financial woes. Nevertheless, debt can lead workers down a dangerous road — one that could have serious implications for their ability to hit expected service metrics. By providing the opportunity to help employees get out of debt, employers can choose to do something ethical and restore productivity to the workplace.

Promoting Financial Literacy

The number one piece of baseline employer support is financial literacy. IoL reports that South Africa is ominously low on financial literacy, creating a serious shortfall in the skills and knowledge required to successfully balance household budgets. In addition, poor financial literacy challenges individuals across the demographic spectrum and can result in up to 31% of fiftysomethings experiencing stress due to tough financial circumstances. Educating financial literacy to all groups at any age is the need of the hour to avoid stress in finance and make employees financially independent. Purpose: to Support Charitable Causes

South Africa has a host of effective networks dedicated to supporting people in debt and offering businesses the chance to craft a public image. When you sponsor these networks, you identify yourself as an authority — particularly to employees who are struggling with financial burdens — and create a place where people would go for help. This, therefore, helps to improve your local area and grow a new talent pool for future hires within your own business. Take a page out of the Quinton van der Burgh playbook; his foundation provides funding for those willing to learn about financial literacy and how to set up savings accounts.

Enhancing Profitability

On top of establishing a strong foundation, one critical step enables businesses to immediately improve the quality of life for their employees: raise wages. This is unlikely to be an option in all cases, though fiscal expectations are such that there will likely be more central bank money available to businesses in the next couple of years. Tax incentives, if applied, have the potential to revive SMMEs and beef up GDP growth, which is at a snail’s 1.3%, according to projections from the IoL. This, in turn, will allow businesses to pay more. The training and certification are the best but using this momentum to help encourage your employees on debt management will be an important foundation for a successful future.

A debtless employee is a happy employee, and happy employees are productive ones. Forge the relationship of being there to support and provide advice from an employer or organization perspective. This will in turn help your employees so they can be more productive.