Whilst the growth of the South African economy is already hindered by a high unemployment rate at 24,3% as per Statistics SA’s latest results, there are additional factors to consider within the workforce that have an influence in this regard.
Some of the most pertinent challenges faced by companies over the next few years include attracting, engaging with, retaining and developing staff – all of which affect the performance of companies and ultimately contribute to the strength of the economy. This is according to Professor Llewellyn E. van Zyl, incoming President of The Society for Industrial and Organisational Psychology of South Africa (SIOPSA).
Comments Frank Lenisa, director at Compuscan, one of South Africa’s leading credit bureaus: “Due to the fact that our credit bureau services are intrinsically linked with the functioning of the economy, we’re intensely aware of that which minimises or boosts the performance of the economy. We certainly agree that, dealing with more than 200 employees of our own, employee wellbeing is an essential component of business output and turnover.”
This is of relevance to companies across the board, particularly in this day and age as research has suggested that almost half of the world’s population is relatively unhappy at work. What is noteworthy to companies that wish to enhance their performance output is that unhappy employees tend to show lower levels of productivity and motivation, as well as increased levels of absenteeism, turn-over intentions and unethical behaviour which may result in financial losses, van Zyl confirms.
He adds: “One of the best ways to retain and engage with individuals at work is to invest in their personal and professional development as well as their personal wellbeing. Happiness, in the context of the working world, is the outcome of an individual’s subjective experience of personal wellbeing, be it socially, psychologically or financially.”
Also according to van Zyl, financial wellbeing is a composition of an individual’s personal characteristics (including personality, personal development, career phase and risk appetite), financial behaviours (such as the way in which financial resources are managed) and financial stressors (for example, unexpected medical expenses), and encompasses the effective and/or strategic management of personal finances.
Alarmingly, a high number of South Africans are severely in debt and according to a recent report, spend on average 107% of their monthly income. This reflects the fact that many South Africans lack financial education, struggle with the ever-increasing cost of living or make unwise financial decisions.
Lenisa adds to van Zyl’s insight: “Considering both sides of the coin – the fact that employee wellbeing is an essential factor in companies’ growth and the strengthening of the economy, and that many South Africans lack insight into managing their debt carefully, we have just launched an offering that will enable companies to invest in their employees by providing them with their credit reports on a monthly basis.”
This offering, called My Credit Check Manager, provides employees with their full credit report and credit score as well as tips on how to manage their debt and improve their credit reputation, and thus companies are given the opportunity to invest in the financial health and wellbeing of their employees. Further to this, companies are able to show a vested interest in their employees on a practical level.
The deduction made by van Zyl that is also pertinent to companies on a practical level is that investing in the financial wellbeing of employees doesn’t mean that salaries should be increased or that bonuses should be given. Based on decades of empirical research, it has been shown that money is not a motivator for performance, but rather an employer that invests in the financial education of its employees through structured programmes (debt management, personal budgeting, the management of financial stressors, etc.) proves to be more effective in motivating employees, particularly in practicing good financial behaviour.
“We realise the need to contribute towards changing the level of financial savviness in South Africa, especially in terms of managing debt wisely in trying economic times. For this reason, we are proud to have created an offering that assists businesses in providing a value added service to their employees and that guides employees in improving their creditworthiness,” Lenisa concludes.