Theasen Pillay. Image: Supplied.
JOHANNESBURG - In what is undoubtedly one of the more economically challenging periods in South Africa, during which businesses are investing extensively to ensure maximum productivity, there may be a simple, yet uncharted solution that could immediately increase productivity by a phenomenal 30% or more. 

The “magical answer”, is to merely establish a practice within the business to proactively guide its employees out of their personal debt. This will be achieved by the business facilitating or encouraging its employees to consult with a competent Debt Counsellor, should the employee be in financial difficulty.

In was reported by Alexander Forbes that “South African employers are wasting a staggering 35% of their payroll bill due to staff productivity”. 

Momentum is reported to have estimated that “The cost of lost productivity as a result of absenteeism in South Africa to be R70-billion, or 2% of GDP. It also estimates that the cost of lost productivity as a result of "presenteeism- the hours when you are present at work but not focused on your job as a result of financial or other stress - to be four times as much.”

The serious realities relating to the true status of the South African Credit Consumer are, to the majority, largely unknown. Here are some of the astonishing and disturbing truths:

  • More than half of credit consumers spend 75% or more of their monthly income to creditors, leaving little or no money for basic living expenses.
  • Approximately 23% of South Africans don’t have any money left at the end of the month. Most (76.58%), are simply “flat broke”.
  • More than 11 million are described as over-indebted. Conservative estimations indicate that two (2) out of every (3) credit consumers are overindebted. 
  • People who have either exhausted or have no further access to loans, are out of desperation, applying for divorce - as a means to access 50% of their spouse’s Pension Fund.
  • According to data from the World Bank, South Africa was the world’s number one country for people needing loans.

Businesses are likely to have two-thirds of its employees suffering to get by, as they are overwhelmed in debt.

Company executives are now beginning to see the value of helping their employees to manage their finances. Businesses are thus persuaded to take a greater interest in their staff's personal finances, as doing so is likely to have significant impact on their bottom line.

With the rating of the Rand being downgraded, by S&P Global Ratings, to “JUNK”, it was recently reported that the “Rand expected to be hammered as investors pull out”.

This means that the South African businesses must prepare for more challenges and must proactively strategise on actions to counter the factors that could jeopardize productivity. 

Facilitating and promoting Debt Counselling for their financially troubled employees is not just an inexpensive exercise but also an extremely effective means to promote optimal productivity. 

The iconic Richard Branson, said it best when he noted:  “If you look after your staff, they will look after your customers. It is that simple” 

Theasen Pillay is a Litigation Attorney and Debt Counsellor at TPA Debt Management.

The views expressed here are not necessarily those of Independent Media.