Illustration: Colin Daniel

Employer-assisted saving was among the topics debated at the launch of this year’s National Savings Month, a campaign led by the South African Savings Institute (SASI) and supported by Absa and the Industrial Development Corporation.  

At a recent event in Johannesburg, the spotlight fell on how employers can play a role in helping their employees to free themselves from debt and begin to save.

Absa wellness executive Dr Lesego Rametsi cited a 2017 PWC report on the effects of employees’ financial stress on productivity. “Research shows that 30% of your employees are distracted due to financial stress and 46% of them spend about three hours a day thinking about or addressing financial issues. This has a major impact on productivity and the bottom line. Sick leave costs R12 billion a year in South Africa,” she said.  

Rametsi said organisational culture plays a huge role when it comes to the creating the necessary level of trust for employees to be open about their financial affairs, and she also busted a few myths.

“People believe that the higher levels of an organisation are safe and well informed on saving, but this is not necessarily true, and programmes must be inclusive at all levels. Education programmes also often take a one-size-fits-all approach, whereas really a high level of customisation is required. For example, the needs of a graduate and a pre-retiree are different. We must also be sensitive to specific needs – for example, spending a large amount on a car may not be the conservative financial approach, but may in fact have a huge impact on the quality of life of that employee.”  

SASI chief executive and financial adviser Gerald Mwandiambira said saving involves a behavioural change, which employers and HR professionals can help facilitate. “HR professionals should be educating employees to start building a savings buffer and recommending that they regularly review their pension fund contributions. When you start working, you may have a provident or pension fund, but you’re not educated on how it works. Forty years down the line, you realise you should have used it better. Education is key.”   

He said employers can be more active in facilitating the savings process for salaried employees, such as considering garnish options where a specific amount is automatically deducted from an employee’s salary to go into a tax-free savings account, or structuring 13th cheques as a savings tool.


Employer buy-in

But is there the will among South African employers to help their employees achieve financial wellness? And are employees willing to be helped?

Kathryn Main, chief executive of Wellness Assets, which provides financial literacy and wellness courses to corporate South Africa, says that in her experience, employers are not very involved. “Staff who are in financial trouble tend to keep that information to themselves, potentially because of the stigma that is associated with being in financial difficulty. There is also the legal stigma such as being blacklisted, having your possessions repossessed or having to declare insolvency.”

Main believes there needs to be more intervention by employers. In one study 70% of employees surveyed said that financial stress was their biggest stress factor.

“Stressed and unproductive employees are not able to concentrate or be creative when it comes to problem solving or proactive with ideas and solution-focused thinking,” she says.

SASI’s suggestion of employers introducing automatic saving is feasible, Main says, but practically getting buy-in from all staff and managing the money in the correct funds would be a challenge.

“Creating a saving culture happens over time, not overnight. Perhaps first trying an office stokvel to gauge staff interest would be a good way to start. Some companies do this in lieu of a 13th cheque pay out at the end of the year, which can help individuals with large financial responsibilities such as school fees, going on holiday or settling debt.”

  • The 2018 SASI July Savings Month Community Campaign will take the savings campaign to grassroot communities, stokvels and tertiary institutions. SASI will hold workshops during July in various communities and at tertiary institutions.