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Labour Complexity

Retaining Employees After Layoffs

Your remaining staff is picking up the slack, but you can’t afford to pay them more. So how do you keep them happy?

Entrepreneur

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This is a common management situation today. Firstly, you do not have to pay your employees more money to keep them motivated. Many managers don’t understand that money is not the thing that motivates people on any given day; they are motivated by what happens to them on that day.

Most employees understand the economic bind that companies are in now. If you read the newspapers or watch TV, you have to know that many businesses, large and small, are struggling for survival. Only employees who are very secure in their jobs, have another one waiting, or have daddy’s money would dare ask for more cash, no matter how much more they are asked to do.  However, even though you don’t have to pay more now to keep them motivated, if business turns around, the prudent and fair thing to do would be to give them a raise then. The real question becomes, “What do I do in the meantime?”

If people are asked to do more, they will feel good about it if they get something in return. During the recent dotcom boom, managers thought they could handle this problem with things like stock options and various delayed-payment schemes. When the bust came, people felt they had been duped because they had worked long and hard for large future payoffs, and the stock turned out to be worthless.

What works best is to make sure employees are not only told they are appreciated, but that it is demonstrated by management actions every day. This may seem overly simplistic to many, but one of the worst feelings you can have at work is that no one appreciates what you do.

An old saying goes: “If people are not told overtly and clearly that they are appreciated, they will assume the opposite.” Everyone knows this is true, because everyone has been in a situation where they’ve felt that hard work and extra effort were not appreciated.

There are three things you can do that will go a long way towards keeping morale high, even when you cannot use cash:

1. Listen to them. Take some time each day to talk to employees about what they’re doing. Give them the opportunity to tell you what they did, how hard it was and how they went about solving a problem or achieving a result.

2. Tell them. Tell employees their work is appreciated. Tell them clearly, and tell them often.

3. Show them. Take the initiative to do things that are unexpected. Bring in food; take them out for lunch; let them leave early. This is particularly effective when people have completed a difficult task or solved a complex problem.

Little things like these can mean a lot. Remember, these ideas are not a substitute for paying people fairly and equitably, but when put into practice, in good times or in bad, they will make people feel they are valued and valuable.

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Labour Complexity

Why You Should Consider Retrenchment Cover for Your Employees

Not sure if a retrenchment benefit is for you? Keep reading for more insight into why considering retrenchment cover for your employees is best for them and you

Amy Galbraith

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As a business owner, looking after your employees is an important part of what makes your business a success. You need to be sure that all of their needs are being met, especially in terms of income protection and retrenchment insurance.

If you’re lucky, you may never need to retrench anyone, but if you do, having retrenchment insurance in South Africa can help your employees immensely in keeping debt at bay.

You can invest in retrenchment cover in South Africa in order to protect your staff. The retrenchment cover can provide your employees with a lump sum which allows your employees to manage any issues that might crop up while they are unemployed. It will also help with temporary disability cover should an employee be injured at the workplace.

Not sure if a retrenchment benefit is for you? Keep reading for more insight into why considering retrenchment cover for your employees is best for them and you.

It Can Help to Replace Their Income

If one of your staff members is the sole breadwinner in their household, being retrenched can have a devastating effect on their family’s way of living. If you offer them the option of income protection cover, this will replace their income while they are looking for other employment.

This will also help if they have permanent disability due to an accident at work and are unable to earn a salary for a certain amount of time. The benefit pays up to six months of income so that the insured can cover expenses. For example, your employees can use this money to make car insurance payments or rent payments while they are unemployed. This can help them to look for work without having the added stress of not earning any money.

Employees Can Maintain Their Savings Accounts

By offering retrenchment cover, you are allowing your employees to have better financial planning abilities, such as maintaining their savings accounts despite no longer being employed.

Your employees will be able to keep this savings account intact and rely on this money for its intended purpose. They can also keep this money in the account and use it when the income protector cover has run out and they are still unemployed. Be sure to speak to a financial adviser about how long your employees will be covered in order to adequately make plans for their future.

Planning for VAT and Petrol Increases

When you are unemployed, any increase in prices such as petrol or VAT can negatively affect your financial situation,  so it’s preferable that your employees are able to weather any price increases without having to dip into their savings, or take out a loan they can’t afford.

But retrenchment cover will allow them to continue living their life, unaffected, regardless of these changes. While they might have to cut back on their spending, a VAT increase will not affect them as harshly as it would if they did not have any income protection. Being able to prepare for an uncertain future will ensure that your employees are happy and satisfied in their jobs, cementing their loyalty to your company.

It Can Help with Illnesses During Retrenchment

We can never predict what awaits us in life, which is why you should consider retrenchment insurance for your employees. If they were to become ill during the time they are retrenched, expensive medical bills will pile up, putting them into a further debilitating financial situation.

But, if your employees have retrenchment insurance, they will be able to use this money to pay for medical expenses. For example, if one of your employees has young children who need to be rushed to the hospital for an injury or illness, the retrenchment cover will allow them to pay for these bills without too much stress. Being ill while unemployed can become expensive and stressful, but you can alleviate this stress by providing cover for your employees.

It Will Show Them You Care

Having an employer who truly cares about them means that employees will be happier, healthier and more productive. And this is great news for your business. You can ensure that your employees are taken care of if you need to retrench them due to whatever reason.

Having loyal employees is not only good for your company but good for your employee morale too. You are only successful as a business if your employees are happy and willing to work hard to reach your company goals.

Retrenchment cover will allow them to be less stressed in their positions and will make your workplace a more productive one. Be sure to consult with your staff before making any financial decisions that will affect their future as their opinions matter the most in this instance.

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Labour Complexity

Charity Begins At Home This Festive Season

3 Ways to invest in your own employees.

Nation Builder

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We often only think of corporate social investment (CSI) as an organisation’s actions in the surrounding communities (philanthropy and volunteering), but CSI is also inward facing. By promoting employee well-being, your business can be a vehicle for change, not only in the society around it, but also directly in the lives of those working there.

Here are some ways you can invest in your own employees during the festive season:

1. Involve your employees in a higher purpose

This might sound like a bit of circular reasoning, but studies have shown that involving employees in CSI activities has several benefits. People involved in meaningful activities tend to be more motivated and willing to go that extra mile because of the higher good associated with the work. CSI programmes also:

  • Increase co-operative behaviour and employee relationships
  • Enhance the sense of company identity
  • Improve employee retention and commitment
  • Create an attractive company culture.

Related: What’s The Fuss About Corporate Social Investments?

2. Provide the space for physical and mental breaks

The end-of-year and festive period is often a very stressful period. Balancing festive and family duties with increased pressure at work due to colleagues taking leave, looming year-end targets and planning for the next year can take a toll.

You, as the employer, can ease this stress by ensuring that there are systems in place that define holiday working policies. Promote time and productivity management to plan workflows and keep the momentum going in these last weeks of the year. Also make sure you have effective communication strategies in place for plans that are in the pipeline for the new year, so that employees can get their heads around upcoming changes. This will allow employees to plan ahead and build in time to switch off, knowing that all of the boxes have been ticked.

3. Constructive feedback/motivation

Also, take the time to acknowledge and show appreciation for the hard work that your staff has put in throughout the year. As the saying goes “valued employees are valuable employees.”

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Company Posts

How Medical Savings Accounts Are Changing – For The Better

By Jeremy Yatt, Principal Officer of Fedhealth

Fedhealth

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The concept of medical savings accounts (MSA) emerged in the industry in the early 1990s, reputedly when Discovery founder Adrian Gore was working at Liberty. At that time medical scheme benefits for different kinds of day-to-day healthcare were specified, so for example, you’d get a certain amount of Rands to spend on your over-the-counter medicine, or for optometry services. But this was problematic, as people’s daily medical needs are all so different. So, you’d have medical aid members calling their medical schemes saying, “I haven’t used my spectacle limit this year, so can I transfer it to use on medication instead?”.

The idea for MSAs was to pool these separate benefits into a total Rand amount, that you could then spend how you wanted, and more importantly, retain if you didn’t use them all. Initially, medical schemes were reluctant to follow this idea, as they thought it would lead to under-servicing: medical aid members might be unwilling to spend their savings, and so might not get the proper day-to-day medical attention until it became a crisis and they were hospitalised. However this was not the case, and MSAs proved very popular.

At first, there was no real limit on how much of your contributions as a member could go into your MSA, so most schemes allocated around 40-50%. Many schemes also pushed major medical procedures like MRI scans into savings, which was effectively a way of forcing members to self-fund these costly medical expenses. As a result, the Medical Schemes Act was amended in 1998 to impose a 25% limit on the benefits that could be put into MSAs, which largely forced the schemes to be responsible for these major costs.

Related: Why Your Employees’ Health Is Your SME’s Wealth

Under the previous structure there was no disincentive not to use your benefits, particularly as they didn’t roll over from year to year like Medical Savings do. It was therefore not uncommon for a call centre to get queries from members asking how much was available in their different benefit areas, so that they could make sure they used them all up.

MSAs solved these sorts of problems by giving medical aid members increased convenience and autonomy, which is why schemes have been using them for the past 20+ years.

The concept of an MSA isn’t far removed from a loan. Like a loan, an MSA lets you use a sum of money when you want to, but you still have to pay for it regardless of whether you use it or not. It forms part of the registered gross contribution to the medical scheme. Take the example of a member who has R12 000 they can access in their MSA each year. Effectively they are paying for this “loan”, contributing R1000 a month, starting in January. However an MSA means they can use all of that R12 000 upfront, such as if they need expensive dental treatment (crowns etc.) at the start of February that costs R12 000.

In this situation, the member has only paid for R1000 worth of that R12 000 “loan” (with their January contribution), so they effectively “owe” the medical scheme R11 000, which they then pay off over the remainder of the year. If the member left the scheme straight after their dental work, the scheme would then contact the member to repay the R11 000, as they still owe that amount.

Related: Is There A Link Between Physical And Financial Wellness?

The concept of giving members access to medical financing led us to develop our new MediVault offering for day-to-day medical expenses. Describing it as a loan holds negative connotations for some, but it’s not that different from the concept of an MSA: in fact, we see the MediVault as a natural evolution. All it means is that you won’t need to pay for day-to-day savings upfront. Instead, you’ll be allocated money for these everyday medical expenses in your personal MediVault and, once you’ve taken the money out, you only have to pay it back over a period of 12 months – completely interest-free. This is a far better option than taking out an expensive loan from a traditional loan company, or getting it from an unscrupulous loan shark.

Our MediVault offering is not at all about loaning funds to people irresponsibly. We’re not creating a monster that’s going to indebt you – we’re just changing the way you can access funds for your healthcare. After all, health is everyone’s most worthwhile investment, and we want to give people the flexibility to make it their top priority.

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