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Why Uninsured Employees Are Bad For Business

Often businesses assume that their employees will take the necessary steps to insure themselves, but in reality, many people don’t. By covering your employees you’re not just insuring their financial futures if something happens, you’re covering your business too.

Anthony Miller

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Entrepreneurship is not for sissies. It involves dreams and risks. Cash flow is crucial and often thin on the ground, as owners juggle the challenges of overheads and growth. An entrepreneur or SME owner cannot fall back on the financial cushioning that is characteristic of much larger corporate businesses.

That said, as an entrepreneur have you ever thought what would happen if one of your staff members were suddenly unable to provide for their families due to death or disability? Would their family be left destitute? Would you as a business owner feel obliged to contribute to cover funeral costs and offer support to the family concerned?

If so, you should be considering a group life policy as the financial and emotional strain on the business can be significant. Group cover is generally far cheaper than retail cover. In many cases, employees can even cancel their individual cover and, in so doing, save a significant amount of money.

Recognising both the need and the opportunity, our business, Simply Financial Services, recently introduced an online Group Cover product. These are our top five questions asked by business owners when considering employee benefits.

Related: The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

1. Why is group life cover better for my employees than their retail alternatives?

Group life insurance holds numerous benefits for individuals. First, since the employer pays the premium, persistency is typically better and dependants are more consistently protected. Second, the cost of group cover is often far lower (for equivalent cover) than the individual could get directly. Third, better cover may be provided for people with impaired health. And finally, waiting periods are often waived or shortened. We’re convinced that good value group cover is a net positive investment for a company.

2. Is group life cover affordable?

Group life cover starts at very affordable levels. Meaningful cover can be obtained from about R49 per employee per month. Also, there are ways to structure the payment of premiums in such a way that it becomes part of your employees’ total remuneration package. You may for example want to structure it so that the employee makes a contribution, which is matched by the business.

Affordability is obviously important to SME owners and entrepreneurs. Costs need to be weighed against benefits both in terms of increased loyalty and job satisfaction from employees, and the potential cost to the business if a key member of staff is disabled or dies.

3. What does group life cover typically include?

Cover varies a lot from provider to provider and ranges from very simple funeral policies to very complex death and disability cover. Cover can be a multiple of annual salary or a fixed amount of cover for both life and disability, and a fixed amount of cover for family funerals. You should look out for the following when selecting your product:

  • What’s included in the cover? What benefits does it include? In our view, you should look for a product that provides good value protection products (eg. life, disability, family funeral). This caters for as wide a range of scenarios as possible. Be careful you don’t end up with a bundle of value added services (eg. free airtime) and very little life or disability cover.
  • Free cover limits. Is there a guaranteed amount of cover (the ‘free cover limit’), up to which your employees are covered for death and disability from both natural and accidental causes (full cover), irrespective of employee numbers?
  • Waiting period. How long would you have to wait, from when you take out the policy, before your employees get full cover, rather than just accidental-only cover?
  • How does the price compare with your alternatives — both group and retail — and how are premiums likely to change over time?

Related: 11 SA Entrepreneurs on What They’ve Learnt About Managing Staff

4. What’s hidden in the fine print?

It’s really important to check the fine print, to ensure there are no nasty surprises when there’s a claim. Many providers have complex policy rules and documents, and SMEs only discover the details when it’s too late. A good barometer is to look at how simple and transparent the sign-up process is, and how user-friendly the policy documents are.

5. What provider should I choose?

Make sure your insurance provider has a reliable track record, and is underwritten by a recognised insurance provider. There are a lot of fly-by-night players out there and you need to ensure that the policy you are buying has the backing of established and well-recognised market players. You need to be confident that your insurer can be trusted to pay when it comes to claim time.

6. How do I go about buying and administering the policy?

Traditionally, brokers have sold group life policies and provided admin support to their clients. Since quite a lot of work is involved and commissions are limited, brokers have not typically been available to SMEs. As such, there is a long tail of SMEs who don’t have group life cover and their employees are at risk. Fortunately, there are now options available that allow SMEs to do it themselves online and for brokers to serve SMEs cost-effectively.

You need to decide whether you want the peace of mind of working through a broker or the speed, control and convenience of doing it yourself online.

In conclusion, we believe group life insurance offers much value and peace of mind for SMEs. While many South Africans have funeral cover, very few have life or disability cover.  As an SME owner or manager, you can show you care by taking a policy for your employees.  Not only will you probably save money relative to an equivalent retail product, you’ll be amazed at how much your employees will appreciate your care and generosity. And you’ll be able to sleep easy, knowing their families will be taken care of if they die or become disabled.

Anthony Miller is CEO and co-founder of Simply, a year old insurtech start-up aiming to disrupt the life insurance space in South Africa and beyond. Simply uses technology, data and behavioural science to radically reduce the cost and complexity of life insurance. Simply's products include Family Cover, which is bought directly by individuals, and Domestic and Group Cover, which are bought by employers to protect their employees. Anthony is married to Lara and is father to daughters Jessica, Samantha and Lucy.

Managing Staff

What To Include In Your Induction Training

Induction training ensures that new workers adopt good working habits, helps them to feel as though they are part of your company and alerts them to the expectations that your company has for employees.

Amy Galbraith

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Introducing new employees to your company and your processes is a vital part of hiring new talent. You will need to teach them about any administrative processes that will happen during their onboarding period, as well as show them the ropes of their new position.

This is known as induction training, and is of vital importance to any new employee who enters your company. Induction training ensures that new workers adopt good working habits, helps them to feel as though they are part of your company and alerts them to the expectations that your company has for employees.

The description and expectations of the role

This is one of the most important parts of your induction training and should be the first step you take for your new employees. This should start as soon as they have accepted their role, as it will make the onboarding process easier and more efficient.

You will need to send them an offer letter, two copies of the contract (one for them to sign and one for them to keep), details of all benefits and a copy of the employee handbook. On their first day in the office, you should describe their new role to them in detail as well as how they are expected to perform. By taking this simple step, you are preparing your employees for the rest of their time at your company.

Related: As An Entrepreneur, Be A Motivational Leader To Your Staff

Health and safety in the workplace

You are legally required to provide your employees with any health and safety information they need to carry out their roles. You will need to provide them with a copy of the company’s health and safety policy. And ensure that they sign it once they have read over it and understood it.

You must inform all new workers of the fire safety procedures and tell them what to do if the alarm should sound.  Health and safety in the workplace also involves your policies on using the kitchen in your office, so be sure to show them the kitchen and educate them on any rules you might have.

Tour the premises

It is important that your employees know the layout of the inside and outside of your office, especially if an emergency should occur. It is also helpful for them to know where the kitchen and restrooms are.

A tour of the premises will also allow new employees to familiarise themselves with the different departments. If they need to speak to the client services department, they will know exactly where to go rather than having to wander the halls lost. While this might not seem to be a vital part of induction training, it is helpful in making your employee feel welcomed and accepted in the company.

Introduction to their colleagues

Introducing new workers to their colleagues is an important part of induction training. You should start by introducing them to their line managers, the HR department, the health and safety officers and the employee representatives.

Meeting their line manager first will allow your new employee to get a feel for the role and get to know who they will be reporting to. It can make first days less stressful and maintain a friendly office atmosphere. Have a moment during your morning discussions to introduce your new employee to the rest of their colleagues, but be sure that they are okay with you doing this beforehand.

Related: What must I include in an orientation pack for new staff?

Provide ample orientation

The orientation period of the training should not be forgotten, nor should it be lackadaisical. You will need to include an introduction to the processes of logging on to computers, where to find stationery supplies, and the policy on use of phones during working hours.

Show your new employee how to turn on and log into their new computer, including how to access folders, emails and the company’s drive. It might be a good idea to assign a “work buddy” to your employee to help them with any new tasks at first. Providing ample orientation will make the transitioning process easier for your employees, but be sure to have regular catch up meetings during their first three months to see how they are handling the position.

Induction training is important

If you own a fast-paced company, you might not think that induction training is very important. However, nothing could be further from the truth. Induction training is immensely helpful for new employees, just as courses for team leaders are for more established employees.

You will need to provide a thorough description of their role, explain the health and safety procedures of your office and introduce new employees to the rest of the office on the first day. From here, you should have regular checkups during their first three months to ascertain their progress.

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Managing Staff

Employees Underperforming? How To Respond To These 3 Excuses

Sometimes, an employee just needs an extra jolt. Other times, you will need to pull the plug.

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Companies are increasing their focus on employee retention. In fact, PayScale’s 2018 Compensation Best Practices report found that 59 percent of respondents considered employee retention a “major concern” for their companies and organisations. This isn’t surprising given that a revolving staff door can make it almost impossible to preserve recent organisational knowledge and keep up with projects and responsibilities.

So, yes, keeping retention top of mind is smart, but sometimes a staff change is unavoidable. When you’re calling the shots, firing people will almost certainly make you uncomfortable. Whether you are running a small start-up or a Fortune 500, you can’t hide behind other people and say the decision was out of your hands.

Then, the bigger your company gets, the harder it will be to respond in order to change quickly and effectively. While employees can grow into their roles, you shouldn’t let your sense of loyalty to your current employees prevent you from making good business decisions.

It’s just logical that some of your original staff members are going to be unable to keep up with the pace and to cease to bring enough value to the company. In those cases, you should maintain a realistic attitude as to when it is time to part ways. And, when those tough conversations need to happen, your sense of loyalty to your employees can be your worst enemy.

A retention reality check

checking-in

In your personal life, “loyalty” generally means believing in an individual and defending him or her when that person comes under attack. When you become part of a team, however, the definition of loyalty changes.

As a leader, you need to think about your loyalty to all of your employees instead of just one person. When a team member cannot keep up or shows signs of burnout, he or she will likely require co-workers to pick up the slack. When you hold certain people to a lower standard, other employees become resentful, and the poor performer starts to drag the company down.

Related: Dealing With Employee Misconduct

For example, a B2B company we worked with had a marketing employee who had been with the team from the beginning. The company had done well, and its board was pushing for accelerated growth – which required more effective marketing. The employee was a jack-of-all-trades but couldn’t keep up with increased demand. After the difficult decision was made to replace this employee with a more qualified individual, the company quickly hit stretch goals that had previously been elusive.

Often, a leader may be blind to necessary personnel changes, whether willfully or unconsciously. In either case – if this leader is you – the sooner you recognise the problem and take steps to address it, the better off your company will be.

Warning signs that signal a personnel change

It will not always be obvious, but here are three common excuses from employees that might indicate it is time for you to consider a personnel change:

1. “I don’t have enough time” 

Work stress is prevalent across all industries, and a study from Paychex found that roughly 70 percent of those surveyed reported stress levels of at least 3 on a scale of 1 to 5. Certainly, being pressed for time doesn’t help stress, either.

One of your primary roles as a leader is to clearly define your employees’ jobs and responsibilities. If team members struggle to keep up with their workloads, they are probably stretching themselves thin trying to help others, or putting off work to avoid accountability.

When you talk to an employee who claims to be short on time, determine what his or her current projects are and then contain them. Give this employee specific responsibilities that don’t require relying on co-workers, and see how he or she meets these new expectations and goals. If the employee continues to underperform, look for a replacement, although it is not a bad idea to put out feelers for that replacement before you even have the above discussion.

Related: Richard Branson on How to Train Your Employees

2. “I cannot control this”

The ability to find a solution to a work problem is an indicator of someone who “owns” the situation. This is a characteristic you need to see in employees. When I worked at Dell, we had a substantial drop in traffic and couldn’t figure out why. Eventually, we discovered that our laptop batteries were catching fire. Unfortunately, you can’t advertise or email your way out of a drop in traffic due to a problem like that; but you can turn to your partners in crisis communication and social media.

If you give employees all the tools necessary to solve problems and they still can’t succeed, it’s time to reevaluate their fit in the company. By letting them go, you ultimately keep them from stagnating. If you struggle with this concept, look toward Startups.co CEO Wil Schroter, who has said he views his company as a school for employees. When employees get to the point that they would learn better elsewhere, it is time for them to move on.

When you let go one of these employees, make sure that the high performers you do have feel appreciated. Talk to their co-workers to ensure that in the interim, everyone’s roles and responsibilities are firmly established. Also, involve the rest of your employees in the subsequent hiring process so they have some control over who is named as the replacement.

3. “It wasn’t me” 

According to Gallup’s State of the Global Workplace report, worldwide employee engagement sits at a lowly 15 percent. Employees with low engagement often have a decreased sense of responsibility for their work, which wreaks havoc on productivity and accountability.

The most toxic situation is when employees attempt to deflect their own poor performance onto surrounding team members. These individuals rarely admit fault but instead cast broad accusations in an attempt to throw co-workers under the bus. As a last-ditch effort, such employees will even question the data that illuminates their underperformance.

Tough love is the solution here. Like an unfaithful partner who’d rather talk about other people who cheat instead of his own indiscretions, the underperforming employee will try to direct the conversation away from his or her performance. But don’t let that happen: Stay the course and let this employee go.

Related: 7 Signs You Have A Positioning Problem [And Why Familiarity Kills Businesses]

Then, during your subsequent hiring process, be mindful of the departed employee’s character flaw. Ask questions about challenges each candidate faced at previous jobs. Be wary when interviewees shift blame to others or speak poorly about their previous employers.

Most importantly, be realistic about your employees and do your best to fill any gaps with the strongest candidates you can find. And accept the truth: You will never be entirely comfortable about firing people.

If you are, you might not have the empathy required to make a great leader. However, it is part of your job to ensure that your seats are filled with top talent, so be loyal to your whole team and know when to let under-performers go.

This article was originally posted here on Entrepreneur.com.

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Managing Staff

An Excellence Approach To Nurture Star Performers

Talent management is the commitment to continuously nurture and align individual attitude and performance, job requirements and organisational culture through excellent performance management.

Adri Dörnbrack

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1. An excellent view of Talent Management

Any sports team needs to measure the vital statistics and performance of each member. “Metrics” like cadence, heart rate, output ratios etc. are important, for the whole to eventually be greater than the sum of its parts.

Similarly, leaders need to measure (without micro managing) employee performance to get a better understanding of what makes the individual stand out. Leaders need to understand how to adapt environments so that everyone can be exceptional.

Not creating a culture of unhealthy competition, but one where every individual’s contribution is understood and valued, and individual work experience is adjusted to accommodate uniqueness, will keep individuals performing at their peak, while enjoying what they do and understanding the purpose of their work.

2. Nurturing star performers

Employees should be given the best possible opportunity to serve in a work context that is optimal for their skillset and temperament. Talent management is based on the organisation’s commitment to surround all employees with people, practices and processes that will grow them to their full potential.

From a deep understanding of the talent pool a business can distinguish between top, great, good and poor performers. Having a suitable and fair measurement tool in place is critical in this regard. This allows management to clearly understand why people are in different performance categories, and provides insights on what pro-active actions can be taken to develop people into their full capacity.

People are highly influenced by work-related relational contexts and environments. Poor performers can become top performers when there are leadership changes or job changes that simply fit better, but also vice versa. Top performers can become poor performers due to illness or other job related changes. There have also been cases where top industry performers join a different organisation and then struggle to perform due to the individual not aligning with the new organisational culture.

Related: These 4 Types Of ‘Nightmare Managers’ Are Scaring Employees Away

Excellent talent management considers all of these factors:

  • Understand who the star performers are, and why they are viewed as top performers. (Know and acknowledge what they contribute in terms of both job deliverables and attitude).
  • Understand the relationship between the top performer and their leader.
  • Understand the culture of the department and why this fit works for this individual.
  • Then, for the future of work: Consider adapting working conditions or terms of employment in order to keep the star performers (Eg. Flexible working hours, virtual offices, or shorter terms of employment to ensure growth opportunities.)

The biggest contributing factor to ensure excellent talent management is to continuously understand and communicate what is expected from an individual, to have measures in place to know if the individual achieves this, to know what value this adds to the business – and then making sure that they are compensated accordingly.

3. What star performers desire from corporate culture

People don’t want to work merely for personal gain. They want to connect and contribute to a business that shares their values and contributes towards the development of a healthy world and better society.

Spiritual intelligence is becoming increasingly important. This trumps mere personal self-actualisation, and entails feeling connected to a business that has a bigger shared purpose than just making a profit.

People want to connect with businesses that have integrity, moral leaders, and feel part of a network that are responsible stewards, who will value their total personal contribution and help them grow as star top performers within a star team.

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