WHY EMPLOYEE BENEFITS ARE CRUCIAL FOR SOUTH AFRICA’S ECONOMY’ The job market continues to evolve at a rapid pace, given the life-changing impact technology has brought to nearly all sectors. And while different opportunities will offset redundant skills and change the way people work, employee benefits should continue to play a crucial role as an incentive and more importantly, as a financial safety net for workers, and their families, says Leroux Delport, African Unity Life (AUL) Chief Distribution Officer. “If you lose your job, but, with your employer, have been contributing toward say, a provident fund, that will almost certainly give you some breathing room to allow you the chance to get back on your feet,” says Delport. Employee benefits, especially in a developing nation like South Africa’s, has long been regarded by some economists and financial institutions as a means of promoting financial inclusivity for, specifically and especially blue-collar workers. Delport points out that employee benefits should not be regarded as a cold, numbers game only. “It should be viewed in the context of it being a positive toward building South Africa’s socio-economic stability; that it contributes to the overall well-being of the family and by extension, society as a whole.” Employee benefits, it has been argued, should also foster a culture of saving, in a country like ours where income to household debt ratios has hampered this economic ideal. There is, however, some cause for optimism, says Delport. A February article in a weekly newspaper pointed out that the South African Savings Institute has “noted the December 2017 SARB Quarterly Bulletin numbers, which reveal household savings to disposable income at 0.2% per month, meaning households are saving 0.2% of their income”. This, the article further says, “represents a positive savings ratio from the last quarter of 2016, and it means that South Africans are starting to save again. Debt to household income remains stubbornly high at 72.5% in the same bulletin”. Suitable employee benefits would also make a prospective employer more than an attractive proposition for the ideal candidates. “The role that well-structured group benefits can play in positioning a business as an employer of choice should not be underestimated or overlooked either,” says Delport. “It creates sustainability for the employee and most definitely contributes to peace of mind to the employee and his or her family,” he says. “It can also alleviate some TAX burdens for the employee while contributing towards much needed benefits, for example: contribution to retirement annuities and medical aid.” Delport points out that different market segments require different benefit packages, as would be expected. Ultimately it is up to the employer to tailor-make these incentives to suit the requirements of the workforce. “High-end market segment needs and disposable expenditure differs significantly from the lower income market needs and disposable expenditure. For example: the high-end market will include products like: Life Cover, Income protection, disability cover etc. “While the lower end market will typically include benefits such as: standard family or single funeral option with an imbedded repatriation benefit and sometimes some hospital covers as well.” He argues that a more comprehensive, needs-basis approach will prove to be profitable for company and employee. “At African Unity we pride ourselves that we customise white label products and specific offerings to the specific needs of our clients,” Delport notes in conclusion. *African Unity Life is a progressive long-term insurer which specialises in compiling and offering clients customised group employer benefit schemes. The company offers funeral cover, life cover, disability cover, income protection cover, health cover. It also offers legal and debt assistance, trauma assist and emergency evacuation, among other services. Leave a Reply Cancel ReplyYou must be logged in to post a comment.