Poverty is not purely the domain of those with absolutely nothing. Research conducted on data released by the National Income Dynamics Study showed that up to 20% of South African workers remain in poverty, despite working full-time. For many of these people, debt will be the only way to continue to make ends meet. Debt, however, is a slippery slope, and can have a severe impact on the ability of workers to continue to perform to expected standards. Providing assistance to climb out of the debt hole can be an ethical and moral option for employers and a way to boost productivity in the workplace.
The most stable foundation to provide as an employer is one of financial literacy. According to IoL, financial literacy is at perilously low levels across the entirety of South Africa, creating a huge gap in knowledge and skills that leaks through into the budget wielded by the average family. What’s more, a lack of financial literacy can lead to stress and decreased performance across the full range of demographics; according to studies, up to 31% of people above the age of 50 will continue to experience stress as a symptom of an adverse financial situation. Providing financial literacy for those groups is just as important as it is for younger members of the workforce in order to prevent financial stress and equip human resources with the skills they need.
Extensive debt help networks operate across South Africa, and being a sponsor of them can help to raise your business reputation. It can show you to be a point of authority with employees feeling the pressure of debt, and create an environment in which people can get the help they need. In turn, this improves the local population and creates a better pool of talent for future hires in your company. Take inspiration from Quinton van der Burgh, whose foundation has paired financial help with lessons on financial literacy and aids with setting up savings accounts.
As well as providing a solid foundation, businesses can take one action to improve the lot of their workers instantly – improve wages. This isn’t always possible, but economic forecasts indicate that more money may be in business pockets soon. IoL have suggested that tax breaks will see a boost to SME business and improve GDP growth from the relatively slow 1.3% it is currently experiencing. As a result of this, businesses will be better off and can afford to pay more. In times like this, use that, in combination with training and qualifications, to encourage workers to pay off their debt and make a success of their future.
An employee unburdened by well managed debt is a happy one, and a happy worker equals more productivity. Become the employer, or agency, that provides a shoulder to rest on and returns applicable and sensible advice. Your workers will thank you for it, and your productivity will boost upwards, too.
Written by Jane Sandwood.
