Preserve employee health. Preserve your business.

Simplifying employee risk in complex times
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The link between employee happiness and productivity has often been discussed, but only in 2019 did researchers from Oxford University[1] prove a direct link. They found that happy employees are 13% more productive than their colleagues. Since employees are a company’s biggest asset, being good to your employees is definitively good for business.

A recent study found that attracting and retaining talent is the top HR issue in emerging and developing markets[2]. Caring for employees’ health and financial wellness is a great way to differentiate yourself and maintain business success.

This is easier said than done given the tough economic conditions we’ve experienced recently. The Covid pandemic has led to layoffs and pay cuts as many companies were forced into survival mode. On top of that, people are enduring emotional hardship and heightened anxiety levels as we all try to cope with this unprecedented global crisis.

In these complex times, we believe in the power of finding smart, simple solutions that can help you preserve what matters most to your business – your people.

This article lays out a few key solutions and recommendations that can make a difference to employee well-being. We focus on three factors:

  1. The physical health of employees and their ability to pay medical expenses,
  2. Their long-term financial health, particularly savings and pensions;
  3. The ability to pay for household costs should employees experience disability or dreaded disease.

1. Healthcare

Too many people in South Africa do not have sufficient health insurance to cover themselves in the case of an emergency. Employees often see medical aid merely as a cost that gets deducted from their payslips every month, but don’t understand the value it provides. With the large number of medical aid schemes and plans out there, it can also be hard to tell which one to choose. Do you just need a hospital plan? Or a medical savings account? And what about gap cover?

It is therefore important that staff have access to an expert who can simplify the choices and match an individual’s circumstances with the right plan. With the correct medical aid plan in place, employees will have the comfort of knowing that they are protected and prepared for the unexpected.

Beyond a health plan, there are a number of other actions employers can take to preserve the well-being of their staff:

  • Create an employee wellness programme;
  • If you have an existing programme, review it to determine whether all of the benefits are still relevant in our current circumstances and make adjustments where necessary;
  • Mental health is a big part of employee wellness. In this time of uncertainty regular communication, check-ins and sharing of mental health support resources can help staff feel cared for.

Taking a big-picture approach to wellness has positive effects not just for your people, but on your bottom line. According to Discovery, companies with a healthy culture can increase productivity by up to 50%[3].

2. Pension

The South African Treasury estimates that only 6 out of every 100 people will have a decent retirement[4]—a concerning statistic that doesn’t even take into account the issue of debt.

Financial well-being has been linked to overall happiness[5] yet, regardless of income levels, many people don’t have a strong enough understanding of money management to make the right choices for their future. To maintain a happy and productive workforce it is important to educate employees on savings and debt, as well as how to better invest their hard-earned salaries.

What can businesses do to help improve savings rates and ensure that employees can retire comfortably?

  1. Make access to pension plans far easier and less daunting by:
    1. Offering a company pension plan and making participation compulsory to encourage good saving habits;
    2. Educating employees by organising relevant speakers and experts to explain pension benefits, how much will be needed at retirement and how best to go about saving;
  2. Choosing the most appropriate plan:
    1. Low fees. You can’t tell how your investment will perform in the future, but assuming all else is equal, you can end up with 40% less savings if you pay 3% fees vs. 1%[6]. Finding the lowest fee plan is the best starting point;
    2. Individuals have different savings needs. A person’s age, relative levels of wealth, household spend and personal preferences are some of the factors that affect the mix of investments that each person will want. To meet these needs, a level of personalisation is required. If this is too difficult to manage in-house, find a partner who can assist;
    3. Encourage any bonus payments or incentives to be placed into savings or to pay off debt;

3. Protecting income streams

When you ask people what their biggest asset is they will probably point at their house, car or another physical item. The truth however, is that their ability to earn an income is far more valuable.  According to the Association for Savings and Investment South Africa, the average person experienced a shortfall of at least R2.2 million when it came to life and disability cover at the end of 2018[7].

It may also come as a surprise that we are nine times more likely to have a temporary disability than to have a car stolen.[8] While being stuck without personal transport is an inconvenience, an illness or disability that prevents you from earning a salary can have much longer, more devastating consequences.

For a business dedicated to corporate well-being, what can you do to help mitigate these risks?

Including disability cover and an income protection plan in your employee benefits is one key way. This can be backed up by encouraging regular health checks and launching financial education programmes to make people aware of the risks and what they can do to combat these. As mentioned earlier, retaining the best staff is a challenge in today’s competitive market. Showing that you genuinely care about their welfare will make you a more attractive company to work for and help attract top talent.

Tip: Employing behavioural science to encourage good habits.

Companies can help encourage good financial behaviour by getting employees to opt out of financial and wellness benefits rather than having to opt in. This would mean that when an employee joined the company, they would have to tick a box to say that they didn’t want medical aid, pension plans and disability insurance rather than actively signing up for them. These strategies are exceptionally effective and are best demonstrated by organ donation figures. In Austria, 90% of eligible people are organ donors whilst in Germany that number is 15%. With a similar population, the big difference is that Austria requires citizens to opt out by saying that they don’t want to be organ donors whilst Germany requires them to sign up.[9]

How can Shomang Brokers add value?

We know how much your people matter to your business. Shomang Brokers offers comprehensive employee benefits including medical aid, pension funds and retirement annuity—and can assist you to obtain these benefits for your employees. The details and variety of policy choices can be intimidating and we understand that, as a business owner, your time is precious. That’s why at Shomang, we are driven to simplify risk and provide much-needed clarity to guide you in making the best decisions. We are passionate about helping your business to grow by building a healthier, happier workforce.

Contact us today

Tel: 011 452 4462


[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3470734

[2] https://businesstech.co.za/news/business/239945/the-biggest-issue-for-sa-companies-keeping-employees-productive/#:~:text=South%20Africa&text=When%20it%20comes%20to%20organisational,unhealthy%20employee%20lifestyles%20(50%25).

[3] https://www.discovery.co.za/corporate/employer-news-employee-productivity

[4] http://www.treasury.gov.za/comm_media/press/2014/2014070901%20-%20Statement%20on%20the%20Impact%20of%20the%20Proposed%20Retirement%20Reforms.pdf

[5] https://link.springer.com/article/10.1007/s10902-020-00277-x

[6] The after inflation value of R3,000 contributed monthly over 40 years earning 6.5% real interest per year. A 3% fee would have a fund value of R3.1million vs. R5million for a 1% fee.

[7] https://www.asisa.org.za/research/industry-analysis/south-africa-s-life-and-disability-insurance-gap-widens-to-r34-7-trillion-in-2018/

[8] https://www.moneyweb.co.za/financial-advisor-views/what-are-your-chances-understanding-the-need-for-disability-cover/

[9] https://sparq.stanford.edu/solutions/opt-out-policies-increase-organ-donation#:~:text=In%20countries%20such%20as%20Austria,register%20to%20donate%20their%20organs.

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