For many, 2011 will be recalled as the year of the data breach as companies of all sizes made headlines for losing valuable data. Small businesses were no exception as cybercriminals found SMEs their new favourite target. Looking ahead to 2012, the threat landscape won’t be getting any better but Symantec foresees 2012 as a year of action for SMEs where they’ll start taking tangible steps to protect their businesses from the threats they face.
SMEs will head for the cloud in 2012
In Symantec’s State of Cloud survey, security was recognised as the top concern and the top goal for organisations of all sizes considering the cloud. Cloud security services such as email security and web filtering technology allows SMBs to get enterprise-class security as a service that is always up-to-date on the latest threats.
27% of South African small businesses identified mobility (or the ability to work from anywhere) as the key factor of how cloud computing can positively impact their business, that’s according to the 2011 Small Business Survey carried out by the South Africa Small Business Chamber. The survey further found that the most sought after applications or solutions from the cloud would be e-mail (68 %), storage (48 %), document collaboration (44 %) and CRM (33 %).
That’s why in 2012 Symantec expects SMEs will harness the power of cloud solutions for security.
SME’s are getting wise to mobile threats 2012
According to Gartner, sales of smartphones will exceed 461 million by the end of the year, surpassing PC shipments in the process. As a result, this explosion has captured the attention of cybercriminals and we’ve seen significant growth in the amount of mobile malware – from malware simply seeking to embarrass victims to malware focused on information theft. More and more personal and corporate devices are becoming one in the SMB workplace.
This consumerisation of IT creates significant efficiency for employees, but also creates security and management challenges for small businesses and their customers. Not all SME’s have dedicated IT staff to manage these rogue mobile devices, which puts the customer and business information that resides on these mobile devices open to threats, theft or loss.
SME’s need to address the challenges associated with mobility by adopting new models, such as security in the cloud, and implement more granular web security policies for their employees. Educating the end user is also a very important step to ensuring data remains safe and secure.
SMEs become social media savvy and secure
There’s been a significant shift in social media being used solely for personal reasons, to becoming a savvy tool that small businesses use to promote their business or services, to connect with customers or just to keep up with the times. Despite the obvious upsides of being social media savvy, these networks often give users an implied sense of security, making them more inclined to share personal and even business information; click on links or fall for other cleverly orchestrated scams.
Small businesses need to understand how to protect and manage these non-standard applications, since business information that is communicated in these outlets will still need to be secure. Education for end-users i.e. employees is very important. It is important to understand the threats and conduct social networking with care and caution.
2012 the year for disaster preparedness plans
Symantec’s 2011 Disaster Preparedness Survey showed that at a global level SMEs do not understand the importance of disaster preparedness. Half of SMEs do not have a disaster recovery plan in place, and 41 % said that it never occurred to them to put together a plan while 40 % stated that disaster preparedness is not a priority for them. The data also reveals that disasters can have a significant financial impact on SMEs. The median cost of downtime for an SME is $12 500 per day.
Consider the important data that exists in your small business: financial records, customer databases, customer financial data, banking records. Now simply consider the amount of power outages that have been faced in South Africa in the past year, whether planned or unplanned. Apart from the inevitable downtime, consider the data that could potentially be lost as a result if data is not backed up and secured. According to the NSBC 2011 Small Business Survey, a shocking 14 % of SMEs in South Africa said they never backup their data.
Most SMEs cannot afford to not have a disaster preparedness plan in place. When the unexpected strikes, SMEs need to know their critical information is recoverable. Their business could depend on it. 2012 is the time for preparedness!
Look To The Future
By protecting your employees, their future and their income, you’re also protecting your business says Walter van der Merwe, CEO of Fedgroup Life.
It’s proven that staff members perform better when you show them how valued they are. But, investing in your staff members’ futures goes above and beyond the bottom line.
Staff members value recognition for the contributions they make to the business. However, this does not necessarily need to take the form of financial rewards or incentives. As an employer, you can demonstrate your employees’ value to the firm through appropriate insurance cover in the form of comprehensive employee benefits, which show that you’ve considered their long-term wellbeing and that of their family.
Of course, there is a financial commitment on the part of the employer to contribute towards insurance cover, but this goes towards the future prosperity of staff members, rather than an immediate financial benefit. Employee benefits offer security against the possibility that something detrimental will happen, and in instances where the benefit is needed, will have a lasting effect on their lives.
Ensuring that staff members have the financial means to get the best standard of medical care and treatment following injury or illness, will increase the likelihood that they will make a full recovery, and within a shorter period of time. This will enable them to possibly return to work sooner, with full capacity to continue contributing meaningfully to the business and adding value. In this way, employee benefits demonstrate to staff members that they are a significant and considered part of the business, not only at the present point in time, but also for the long term, and they also ensure a degree of business continuity — particularly key employees.
Loss of income
The biggest risk for every employee is a loss of income. Whether their incapacitation results from an injury or illness, an inability to generate an income to support their lifestyle and their family will severely impact an employee’s quality of life. This loss of financial security is therefore the most consequential risk that should be protected against through appropriate forms of insurance, such as lump sum or annuity income protection products.
Another pertinent risk that business owners should address is the need for adequate life cover. Should an employee, who is possibly the primary breadwinner of a family, pass away, their surviving dependents may be left destitute without their financial support. Employee benefits that include a life insurance component will ensure the financial wellbeing of family members left behind in the event of an employee’s untimely death.
Another important risk factor to consider is the threat of chronic or severe illness, and the high costs generally associated with treatment. As employees age they become more susceptible to various types of illnesses. In instances where they fall chronically ill, they require the financial means to cover their medical costs, and generally require time away from work to recover. This is why dread disease or critical illness cover is another vital component of a comprehensive employee benefits scheme.
Choosing the right provider
When structuring employee benefits there are certain principles that should be applied, regardless of the size of company, or the income of the staff and their socio-economic circumstances.
Foremost among these is the selection of an employee benefits provider, along with the appropriate products and the associated cost implications. This role is best fulfilled by qualified, experienced and independent financial advisors who can offer unbiased advice. These trained and certified experts are able to advise employers on how best to support their staff members through the implementation of suitable employee benefit schemes by recommending the most appropriate solution structure, based on factors such as the gender, age, role and income of employees, and their financial responsibilities. This information helps advisors to select the best mix of products that offer suitable cover to meet the unique needs of the employer and their employees, while also considering affordability.
From a personal perspective, every employee gets peace of mind knowing they are protected should they no longer be able to work, or get sick, and that there are financial provisions in place for their family should they pass away. While they contribute a small premium, they will receive an outsized financial benefit should they claim in comparison to the immediate cost.
As it relates to the business, providing comprehensive employee benefits positions the company as an employer of choice, because the organisation shows that it cares for its staff. It also demonstrates that the employer considers their staff to be valuable, which is a powerful means to attract and retain the best talent.
Protect the future
The human psyche is hardwired to choose instant gratification over receiving a potentially greater reward or benefit sometime in the future. People generally tend to discount the value of rewards they’ll receive in the distant future due to a disconnect between what the present self believes will benefit the future self. In this model there is an opportunity cost involved in relation to what someone could afford now by rather spending the insurance premium on items or services that satisfy their more immediate needs.
This is the fundamental reason why insurance is considered a grudge purchase. We ultimately pay a premium every month towards an intangible benefit that will only be realised if and when a claim is made. And, in the case of insurance, that benefit is only realised when something horrible happens — another reason people shy away from examining this basket of products.
The best way to combat this innate psychological reasoning is through continued education, which can help people understand the purpose and the prolific impact that insurance will have on their lives should they ever need to claim. This requires contextualising the possible implications for an individual five to ten years from now, illustrating in real-world terms how different their situation could be in a worst-case scenario, both with and without appropriate insurance. This is a stark but effective means to demonstrate the need for adequate cover.
How To Choose The Right Group Risk Cover For Your Business
Your clients and business partners are likely to be your main focus when you start out as an entrepreneur. But as your venture grows into a fully operative business of scale, your employees will matter just as much. That’s why it’s important to ensure you provide adequate employee benefits, and when it comes to group risk cover, it’s becoming increasingly important to find a solution that matches the needs of everyone in the business.
It’s no secret that the world of work, as we know it, is changing. In a 2017 employee benefits study, US insurer MetLife found that 58% of employees surveyed “want customised benefit options based on their personal information”. And according to the same study, 73% of employees believe their employer is responsible for employees’ health and financial wellbeing. And in spite of this expectation, modern employees are unlikely to stay with the same employers for very long, because technology continues to create new opportunities.
It is within this context that it’s important for you, the business owner, to make your business as attractive as possible by offering your employees benefits that truly match their needs. Start by thinking of yourself as a custodian of their financial security. And in terms of group risk cover, the financial security not only lies in the cover itself, but in offering benefits that add real value to your employees’ financial planning – especially when you consider that it is your employees who are contributing towards their cover.
Why do you need group risk cover for your business?
Employers buy group risk cover for the people in the company to cover their future pay cheques in case something happens where they can’t work before they retire.
But this, unfortunately, is not the case with traditional group risk products, which typically offer blunt amounts of cover that is equal to, for example, three years of pay cheques for everyone in the company – irrespective of how many pay cheques they have left before retirement. As a result of this approach, younger people in the company have less cover compared to what they need, relative to their older colleagues who have fewer pay cheques left
Traditional group risk products also offer very little flexibility, leaving employees with little, or no option to buy more cover above what employers secured. They also don’t offer a choice between lump-sum or recurring payouts when members claim, or always secure the ability to take their cover with them, should they decide to leave the company.
So how will you know you’ve selected the right cover?
Start by asking your financial adviser to look out for a product that works out how many pay cheques each employee needs to cover, and then gives every person in the company the same level of cover in proportion to the amount of pay cheques left until retirement. By following this approach, your employees’ cover will provide more people in the company with much more cover. There already are forward-thinking group risk cover providers in the market that manage to offer up to 50% more cover by following this approach.
Secondly, ask your financial adviser if your employees will be able to buy more cover over and above what you secured. There are innovative products on the market that offer up to double the cover free of underwriting, which enables your employees to benefit from the insurability you’re providing them, and to close gaps in their insurance.
And – in the spirit of the modern world of work with a more mobile workforce – these innovative products enable employees to take the cover with them when they decide to leave your company.
It’s also important to ask your financial adviser if your employees will be able to choose between a lump sum and recurring pay-outs when they claim. Traditional group risk policies tend to expect employers to make one choice between lump sum or recurring payouts on behalf of all of their employees when they take out the cover. Forward thinking cover providers have turned this approach on its head, offering employees the option to choose between recurring or lump sum payouts when they claim.
The importance of claims certaintly should never be understated, starting with obtaining a clear picture of the clinical conditions the group risk cover actually covers. There are new players in the market that provide extensive and transparent lists of clinical claims conditions for additional expense needs, covering more than 200 conditions.
And exactly how permanent does the insurer view a claim for a permanent condition? For example, if an employee is to be diagnosed with Stage 4 cancer, will he or she receive a 100% payout on diagnosis, without the prospect of ongoing reassessment? A needs-matched product offering would never require the reassessment of permanent expense needs claims.
In conclusion …
You wouldn’t expect your employees to work under dangerous conditions. So why would you select a group risk product that will not serve in their best interests when they need it most? That’s where needs-matched group risk cover comes to the rescue – not only for your employees, but also for your business by providing security and benefits offering real value in the modern world of work.
How to Take Risks That Win (Almost) Every Time
Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour.
Looking 13,000 feet down out of an airplane, parachute pack secured, your heart beating in your throat, must be one of the most terrifying experiences imaginable. Though not all risks are life-threatening, all risks are frightening. As humans, we’re constantly afraid of failure, of doing something wrong and of having to deal with the consequences. Yet, at the same time, there is nothing more rewarding than reaping the benefits of a risk gone right – of landing safely ground, to build the earlier metaphor.
For entrepreneurs, risk taking is a necessity of the job. After all, we’re never quite positive that things are going to work out the way we envision. We make choices daily which affect our business, and we can never be absolutely sure that we’re making the right ones.
Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour. While risks are unavoidable, approaching them strategically can be the best way to decrease your parachute’s chances of failing, so to speak, and to produce measurable results that you would never have achieved had you avoided the risk in the first place.
In order to hone your risk-taking skills, here are some guidelines:
1. Information is your friend
The more knowledge you have about any given topic, the less risky your endeavours will ultimately be. For example, many of the most steadily successful brokers on Wall Street are those who understand the patterns of the market better than anyone else. While there are always going to be those people who make millions off a risky uninformed bet, they are the same people who most likely will lose all their earnings on a single trade. Traders who build a sustainable career for themselves are the ones that have deep knowledge of the industry.
Similarly, you should be an expert in your field. You should know your industry well – your product or service you are providing. You should understand the buying patterns of consumers, their motivation and pain points. What drives them to buy your products? Where and when do they buy? What makes them stop buying?
As an entrepreneur – or in any profession that requires risks, really – you’ll want to have as much information as possible. The more you know, the fewer unknowns there are. The unknowns, ultimately, are what makes an action risky.
2. Assess the risk carefully
While risk is a reality of life, there is also something to be said for strong assessment skills. Being able to look at a risky situation and decide whether or not it’s worth taking is a hallmark of a good businessperson.
Venture capital investors, for example, spend their entire careers deciding which companies are worth risking time and money on. Those who throw their money around recklessly, while admirable for their risk-taking, are not necessarily the most successful investors.
Being a good risk-taker involves using the information you have to assess a situation and decide whether or not the risk is worth it.
3. Learn from failure
Appreciate that all risks are learning experiences. Especially those that don’t pan out.
On some accounts, failure is actually more valuable than success. While failures may not lead to an increase in your bottom line, you can use the opportunity to glean important information about what you’ve done wrong, where you misstepped and how you can move forward in the future.
The biggest mistake many people make is seeing failure as a measure of who they are, rather than a measure of where they can go. We’ve all heard that failure is feedback. Most successful entrepreneurs failed at many ventures before they created that million-dollar offering. Most overnight successes took many years to make. If you take a risk and fail, learn from it. Ask yourself what you can do differently next time, and then move on. The only failure is not learning the lesson that it provides and using it to hone your next endeavour.
According to Mark Zuckerberg, “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Taking risks is the only way to go from here to there. Even failed risks move you closer to your goals if you can turn that failure into valuable learning and a plan for improve your results next time.
This article was originally posted here on Entrepreneur.com.
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