This week, two of South Africa’s largest labour unions, SAFTU and COSATU plan to hold legal protest action against the ongoing socioeconomic plight of workers.
The strikes come in the wake of an illegal Eskom worker’s strike over wage grievances in July which heralded a country-wide power shut down – arguably the worst yet – and a recent strike by workers at national revenue services, SARS, which saw 18 branches having to close in the midst of personal tax income filing season – also over wages.
These are just a few examples of what appears to be a growing strike ‘season’ in South Africa – and grievances around remuneration and benefits are a key trend.
Andisa Liba, chief people officer at fintech and earned wage access provider Floatpays, says that fintech-enabled solutions that build employee financial wellness may have a role to play in supporting employers and unions during these important negotiations.
“Our Floatpays State of Employee Wellbeing Barometer found that most South African employees are financially stressed with 74% of respondents rating their financial stress level as medium to high. Industrial strike action centred around remuneration and benefits is a consequence of a financially unwell and financially stressed labour force,” says Liba.
Financial wellbeing is a primary driver of general employee wellbeing, she explains, which has a profound impact on productivity for employers and the broader economy.
“The strikes are a physical manifestation of this. Around half of employees we surveyed say they don’t work to their best ability when financially stressed and this has obvious implications for employers and labour productivity including absenteeism, low presenteeism and workplace errors to name a few,” says Liba.
Interestingly, although the majority of employees said salary, and being paid fairly for the work being done, is an important way for a company to help improve overall employee wellbeing, 64% also said that having early access to their wages would be most useful to improve their financial stress.
“The research shows that on-demand earned wage access presents an additional benefit for employers to take to the table, especially in instances where full wage demands may not be able to be met in that instance.
“Respondents claimed that interventions like on-demand earned wage access would markedly improve their overall relationship with their employer. Research shows that when employees are paid more frequently – biweekly as opposed to monthly, for example – they can cover expenses faster and get ahead in paying off loans. They reported feeling less stressed and anxious, and the employer benefited from increased productivity, fewer mistakes, and higher work quality.”
Liba says, however, that there is a hesitancy from many employers to get involved in traditional employee financial wellness initiatives because of perceived cost and admin burden. When it comes to employee financial wellbeing, employers are reluctant to get involved. Common reasons include the perceived administrative burden and operational overload that providing this type of support creates for payroll teams, and challenges to recover monies loaned out which can result in a significant cost implication for the business.
“But addressing financial wellness as part of the employee experience does not need to be burdensome for employers – financial technology can enable them to easily and seamlessly help their workforce build financial wellness. And while on-demand earned wage access is by no means the silver bullet at the wage negotiation table, it may provide an additional benefit which our research shows most employees would welcome,” concludes Liba.