Human Resources March 2023

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EDITORIAL

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On the cusp of great change

Human resources (HR) is an area of business that has undergone a radical shift in the past few years. It continues to deal with the fallout of the pandemic, such as the manner in which digital transformation has changed the way we work and fundamentally altered the employee-employer relationship. Now, in a post-COVID world, the entire function’s value to the business is being questioned, meaning a significant evolution is on the cards.

In this issue of Human Resources, we examine the consequences of the above for the sector, looking at how companies have changed their approach to issues like employee benefits and wellness. Mental and financial wellness, especially, are high on the agenda for both HR professionals and employees.

We also consider how medical aids have evolved, particularly in light of what the proposed implementation of South Africa’s National Health Insurance might mean to these organisations, and how they may have to evolve in order to coexist with such a scheme.

An ongoing concern for South Africa is the “brain drain”, something that is now being exacerbated by the electricity and infrastructure challenges facing the country. We consider the incentives – from financial bonuses to flexible hours – that employers are offering to keep staff, and whether or not these are working.

Hiring the right staff is imperative in today’s economy, and psychometric testing plays a huge role in getting such appointments right, first time. We look at how effective these tests are, and how they are undertaken.

We also hear from thought leaders who share their insights into key areas of HR like outplacement, skills development and financial advice, as well as those pondering the role of HR in 2023, the possibility of “rebranding” the function, and what it takes to be a top employer.

Clearly, HR is an industry on the cusp of even greater change, and this issue outlines exactly how 2023 is shaping up to be the year that this happens.

Rodney Weidemann Editor

Contents

2 WELLNESS BENEFITS

Programmes to assist employees with physical and financial wellness are a win-win for both parties when implemented correctly.

7 MEDICAL AID

South Africa is preparing to implement the proposed National Health Insurance. We consider what this will mean for medical aids.

8 MEDICAL AID

A look at what differentiates industry-specific medical aids from those that are utilised by the general public.

9 THOUGHT LEADERSHIP – OUTPLACEMENT

With South Africa’s struggling economy, post-pandemic challenges and high unemployment rate, outplacement services are vital for retrenched employees.

15 EMPLOYEE REWARDS

COPYRIGHT:

and

As the country continues to struggle with the “brain drain”,

advice to ensure their financial security.

28

THOUGHT LEADERSHIP – REBRANDING HR

A recent study indicates that HR’s focus is shifting from processes to people, allowing it to rebrand away from inappropriate Industrial Age terminology.

Why wellness programmes are worth it

Programmes to assist employees with physical and financial wellness are a win-win for both parties, provided they are implemented correctly, writes

There is a growing focus on employee well-being, with this now being recognised as a critical factor in the success of any organisation. After all, poor engagement and impaired well-being affect more than just the employee; they impact the company’s culture and indeed the bottom line through greater employee absenteeism and turnover. In addition, wellness issues lead to increased healthcare costs and may negatively impact customer service levels and relationships, with a likely knock-on effect on revenues.

Guy Chennells, product head for Discovery Employee Benefits, points out that the COVID-19 pandemic was a game-changer as far as benefits and wellness are concerned. The high number of deaths caused by the disease was a stark reality check for organisations, creating a greater awareness and appreciation of group life insurance products – along with both higher risk levels and higher insurance costs.

“One critical change was that it ensured employers considered employee well-being in a more holistic manner, in that they had to consider the physical, mental and even financial health of their staff,” explains Chennells. “There is definitely an increased desire by corporates to do more in the wellness space. This is due to a greater appreciation of the business case: that it reduces costs around other benefits, while also reducing the knock-on impact that unwell employees have on the bottom line.”

Chennells notes that prior to the pandemic, the levels of engagement or utilisation of wellness programmes were traditionally low, sitting at around 2–4 per cent.

COVID-19 precipitated a sharp rise in the use of these programmes, with many businesses seeing a rise of more than 60 per cent.

Post-pandemic, people are still leaning into these solutions to manage their health more broadly, he adds. “The key is to understand that a wellness programme cannot be implemented simply to tick a box. An effective

programme isn’t a one-size-fits-all solution, but one that should be led by each individual’s needs and that is really accessible to employees. In this way, the company gains greater insight into how its people are dealing with things and, more crucially, it can proactively identify people who need help, before they need it. If engagement levels are below 10 per cent, it is probably not addressing the real needs of the organisation.”

Technology and company culture

Dr Chris van Straten, global health advisor for clinical governance at International SOS, points out that wellness in the past was often left mostly up to the employee. Companies might provide some screening tests and educational talks, offer information about the nearest clinic, and then leave the rest to their staff. “This has changed significantly in recent times, due to many adopting a hybrid model for the

“Global data indicates that easy access to support – via an app, website or the telephone – helps significantly with certain mental health struggles.” – Dr Chris van Straten

Guy Chennells

RODNEY WEIDEMANN

Dr Chris van Straten

work-from-home era. Now businesses may have doctors or nurses on site to assist employees in the office, while also providing telemedicine and online support, leveraging technology to ensure all employees have access to such programmes.

“While someone in serious distress – such as experiencing suicidal thoughts – would likely require face-to-face human contact, many other employee struggles can be effectively dealt with through the use of technology. In fact, global data indicates that easy access to support – via an app, website or the telephone – helps significantly with certain mental health struggles.”

Nicola Tager, head of careers and employee experience at Investec, explains that company culture plays a major role in whether or not employees engage with the support or initiatives offered. “The first question you should ask yourself as an employer is: Do our people feel they have permission to ask for help? In other words, are they comfortable that there will be no judgement for making such a request?

“It’s also worth noting that many people, especially the younger generations entering the working world, are seeking out organisations whose purpose connects with their own. It is no longer enough to claim to have the best benefits. Today a company’s strategic differentiator lies in having a purposeful connection and a strong culture.”

Tager says that Investec considers its employee value proposition to be company culture. “A good example is the leave policy we have implemented, based around the principles of trust. When employees require time off, they have a conversation with their team and are not constrained by leave balance.”

Mental and financial health

People face a range of challenges today, including family problems, physical health issues, financial challenges and mental health issues. It thus remains a critical imperative for organisations to ensure they have some form of well-being strategy.

“It is important to remember that your employees are also stakeholders who require value from the business,” says Tager. “It is vital to identify and be honest about the pressures we all face. A simple example is the employee’s drive to work: they have to deal with bad drivers, potholes, load

shedding affecting traffic lights and myriad other minor frustrations, first thing in the morning. This is one example of why companies simply have to prioritise well-being.”

Chennells agrees this is particularly necessary, with post-COVID financial issues still biting and the country entering a period of high inflation. “Employers know they have a duty to provide some base level of benefits and savings, to help protect employees against risks on the road to retirement. And because retirement is often far in the future, it is tough to get people focused on it. “At Discovery, we have compared the digital engagement of members who only have a retirement fund with those who also utilise other Discovery products, like Health or Vitality, and learned that utilisation is five times higher for those who have other Discovery products. This demonstrates that simply by putting the benefit in a place employees regularly visit, you can increase its use by an order of magnitude.”

Employee wellness needs to be holistic, adds Chennells, noting that this is why Discovery’s programme includes mental and emotional health components, physical wellness, and also a financial and legal support arm. “At its core, this programme offers interventions for employees, including access to a psychologist, digital therapy options, trauma counselling and leadership empowerment programmes. We have a full basket of tools ready to deploy at any given time.”

The keys to success

Van Straten suggests that although it is important for companies to ensure they have a wellness counsellor available, there will always be a balancing act between the organisation’s requirements and the employee’s own responsibility for personal wellness. “Ultimately, in order for such programmes to succeed, both parties need to come to the table. However, I do believe the company has a big role to play in educating its employees around the benefits of looking after their own health.

“Another key issue is that of preventing staff from falling victim to misinformation. One only has to think of the pandemic-related misinformation around ivermectin and the health issues this caused for so many. This is why education is critical, as it is important for employees to understand where to find trusted sources of information regarding things like diseases and treatments.”

South Africa also has multiple dynamics at play that can impact whether or not employees are willing to talk to a counsellor about health or financial issues, says Tager. “This is why it is so beneficial when public role models and leaders are

INVESTING IN WELLNESS CAN LEAD TO

• Improved employee engagement

• Stronger employee value proposition

• Enhanced value of the organisation’s most critical resource: people, and demonstrating this to stakeholders

• Achieving a broader purpose for the organisation

• Building the organisation’s reputation and brand

Source: PWC

willing to admit that they also face such struggles, as it helps demonstrate to others that there is no need to feel ashamed in asking for help.”

A strategic imperative

“Wellness should be a strategic imperative that is supported by the company culture,” says Tager, “thereby inculcating a proactive approach to understanding wellness and implementing it via a holistic approach.”

Chennells’ advice is for companies to think about what they are trying to solve for, then find a solution that solves that. “For me, it is about understanding the business case for an enterprise’s investment in well-being. And the fact is that spend on well-being provides returns in the form of lower absenteeism and healthier, more productive and more energetic employees, which leads to increased efficiencies – provided the spend is on well-being interventions that actually work, not superficial programmes with low engagement.

“It also translates into lower and more sustainable insurance premiums, and ties into a vision of having a road to retirement for employees. This vision is one where they are protected and provided for by their employer, on the understanding that managing their own health is critical to the success of both the business, and their ultimate retirement plans – because even retirement is not just about money,” Chennells concludes.

“Spend on well-being provides returns in the form of lower absenteeism and healthier, more productive and more energetic employees.” – Guy Chennells

Nicola Tager

Talking outplacement in South Africa

MADGE GIBSON, founder of The Change Initiative and a former executive recruiter, answers some questions, offering an insider view of outplacement in South Africa

Outplacement is a well-established offboarding practice in global markets. Here in South Africa, these services are relatively recent, yet a growing feature of employee termination packages.

The Change Initiative (TCI) – a Cape Townbased outplacement services company founded in 2014 – has been at the forefront of promoting and establishing outplacement as practical and responsible support for released and retrenched staff.

What was your inspiration for starting The Change Initiative?

There were several factors, but primarily, after a decade of interviewing highly skilled and experienced candidates for many roles in many industries, I recognised how few understood how to market themselves. Or even why they had to! I knew I could help people showcase their strengths and successfully navigate the recruitment process. Once I started researching, I realised that what I wanted to create was actually a well-established service overseas that didn’t exist yet in South Africa.

What was your biggest challenge in getting the business off the ground?

Getting meetings with human resource (HR) executives to introduce a service that no one had heard of before.

How does the outplacement process work?

Basically, we address the emotional and practical elements of the job change process. We start by listening. Employees who have been laid off or terminated for whatever reason are often overcome by intense and confusing emotions. We help people put those feelings into perspective and focus them on regaining control of their careers.

After we review and assess a candidate’s existing marketing materials, we discuss their professional goals, strengths, weaknesses and options. These initial conversations are valuable because they offer the kind of objective feedback that allows people to make clear, focused decisions.

For HR, terminating staff is time-consuming and emotionally draining. External support limits the pressure on HR staff so they can return to business as usual.

What does outplacement cost?

We offer three different programmes at different prices, but broadly speaking, you’re looking at between 2 to 10 per cent of annual salary for one-on-one programmes and significantly less for group programmes.

What are some of the reasons companies use outplacement?

Many companies have a genuine concern for employee welfare and want to help speed the transition to a new job.

For HR, terminating staff is time-consuming and emotionally draining. External support limits the pressure on HR staff so they can return to business as usual more quickly.

Another reason is reputational risk management. A public fallout with a disgruntled employee or CCMA action is not the type of publicity any company wants.

What are some of the most frequent client questions and concerns?

“Do you find jobs for candidates?” The answer is, “no, that would be unrealistic”. What we can promise is that people will get the training, support and tools to re-enter the job market with a significant competitive advantage over other job seekers.

Cost and confidentiality also come up, since we’re often exposed to sensitive information about the company and/or the candidate.

Do you have a favourite success story?

Oh, more than one. It’s gratifying to watch people blossom. We often get feedback from candidates saying they have never experienced this kind of practical career guidance before and find enormous value in it.

What are your thoughts on the future of outplacement in South Africa?

The demand for outplacement in South Africa is only going to grow. No doubt about that. But we need to ensure that our programmes meet the needs and complexities of our local market. A one-size-fits-all or heavy-handed technology approach to outplacement will leave many candidates feeling “unseen”, which is completely counterproductive.

Scan this QR code to go directly to the TCI website.

For more information: 021 683 0485 info@tcisouthafrica.com www.tcisouthafrica.com

Madge Gibson

NHI vs medical aids – catalyst or catastrophe?

South Africa’s health system needs a shake-up, and the implementation of a National Health Insurance (NHI) – first mooted more than a decade ago – is hoped to close the gap that currently exists between private and public healthcare.

In terms of Section 33 of the National Health Insurance Bill (2019), which is currently being deliberated by the Portfolio Committee on Health, medical schemes may only provide cover that “constitutes complementary or top-up cover, and that does not overlap with the personal healthcare service benefits purchased by the National Health Insurance Fund on behalf of users”.

This means that when the NHI Bill is implemented,

as is currently stated in the bill, it will certainly increase the financial burden on employees either to pay out of their pocket for complementary care, or to make use of the benefits provided for in the NHI.”

The devil is in the detail

the benefits they need. In his view, the NHI will therefore not replace medical aid schemes.

A sustainable NHI will require “public-private sector collaboration, with supplementary sources of funding”, explains Noach. “Fundamentally, we believe that the private health sector has much to add to the NHI, and that models of cooperation and collaboration are critical for its success.”

The funding debates

The draft NHI Bill seeks to establish an NHI fund that would be able to buy and reimburse healthcare services. The funding will come from general taxes as well as the contributions of those earning above a set amount.

contribute to a medical scheme.” Instead, the NHI fund will pay for defined healthcare benefits for all

Magda Fourie, senior professional officer of the South African Society of Physiotherapy (SASP), notes that if all medical subsidies

the funding of the NHI, customers

However, as the draft NHI Bill is still under consideration, there is no clarity on exactly how it will be funded or phased in, explains Discovery Health CEO Dr Ryan Noach. “Frankly, there is still a long way to go in this regard, including the upcoming National Council of Provinces discussions about the massive structural change to the current funding of public healthcare in South Africa, and it is unlikely to be quickly and easily finalised.”

Moloabi calls for clarification on the benefits that will be covered by the NHI. “The NHI Bill of 2019 states that the role of medical schemes will be complementary, and therefore services not covered by the NHI fund could be covered by medical schemes.” Employees will be able to consider additional complementary cover with a medical scheme if the NHI does not fund

FAST FACT

This funding proposal has met with mixed reactions. In its 2021 financial report, Bestmed noted: “We do not believe that constitutionally, the government can utilise the reserves accumulated by medical schemes, on behalf of members, to fund the NHI.”

Noach adds that “there is significant risk in limiting medical schemes to offering cover only for services not reimbursable by the NHI fund”. He says that instead of the proposed tax-derived funding for the NHI, Discovery supports a blended model that would include a mandatory contribution from those who can afford it.

Medical scheme members would also contribute to the NHI and retain the right to access additional cover. “The reality is that employed people currently using the private sector via medical aid schemes would only be satisfied if the NHI could deliver care that they would expect relative to what they currently receive,” concludes Noach.

As of 2021, 16.1 per cent of all South Africans were members of medical aid schemes. When comparing membership rates by population group, coverage by medical schemes among white members was at 77.7 per cent, at 45.1 per cent for Indian/Asians, at 19.9 per cent for coloureds and 9.3 per cent for black people.

Source: Statista Research Department

“There is significant risk in limiting medical schemes to offering cover only for services not reimbursable by the NHI fund.” – Dr Ryan Noach

Will the implementation of South Africa’s National Health Insurance be the death knell of medical aids, or the catalyst for public-private partnerships to provide universal healthcare to those who need it most? ANÉL LEWIS investigates

Dr Stan Moloabi

Dr Ryan Noach

The case for medical aids is open and closed

edical schemes are not-for-profit entities governed by boards of trustees, operating under the Medical Schemes Act to provide funding for healthcare, explains Barry Childs, joint CEO of Insight Actuaries & Consultants. “National Health Insurance (NHI) will have a material impact on medical schemes when fully implemented. The intention of the government is that the NHI will largely replace the role of medical schemes – open

While schemes specific to an employer or industry are known as closed or restricted schemes, any member of the public can join an open scheme. Closed medical schemes tend to offer higher benefits at lower contributions, as they do not have to carry the cost of people only joining a scheme when they need to claim, says Childs. “These medical schemes also tend to offer income-based contribution tables, which makes them more affordable for lower-income earners, and have fewer options to choose from, making it easier for members to choose a benefit option without feeling overwhelmed.”

Furthermore, as the boards of trustees for closed medical schemes do not operate in as competitive an environment as those of open ones that need to attract and retain members, ex gratia claims payments (by a person to a claimant) tend to be more generous, adds Childs.

CLOSED MEDICAL AIDS

With 1.92 million beneficiaries, the Government Employees Medical Scheme (GEMS) is South Africa’s largest industry-specific medical scheme, according to the Council for Medical Schemes. It is also the second-largest medical scheme in the country. According to its principal officer, Dr Stan Moloabi, a closed scheme like GEMS, which services public-sector employees,

FAST FACT

The number of medical schemes in South Africa decreased from 144 in 2000 to 76 in 2020, driven mainly by voluntary amalgamations and consolidations. Those 76 comprise 18 open schemes and 58 restricted schemes.

Source: Council for Medical Schemes

is able to design products that are specific to members’ needs. “One of the most significant advantages is that risk exposure can be better managed, and standard agreements with healthcare service providers mean that membership costs can be reduced.”

In terms of size and market share, GEMS is followed closely by the South African Police Service Medical Scheme (POLMED) which has 504 758 beneficiaries. Bankmed, LA Health and Platinum Health (for employer groups operating in the platinum group metals and chrome mining industries) are among the larger closed medical scheme players.

POLMED gives members access to prescribed minimum benefits, ensuring that beneficiaries have access to minimum healthcare services regardless of their selected benefit options. LA Health, which provides cover for local government employees, offers five benefit options to ensure affordable healthcare for its members.

Childs says there is a concern that the NHI will have an impact on the level of healthcare members of open and closed schemes have come to expect. But he adds that the NHI also has the potential to improve current public service delivery levels by holding provinces, facilities and public-sector managers accountable for their performance. “If that accountability and responsiveness can be implemented effectively, then service delivery for most of the population should improve.”

Childs’ advice to people considering whether to join an open or closed scheme, depending on their needs, is to become a member as early as possible. “The NHI reforms are still a way off, and delaying your medical scheme membership in lieu of the imminent NHI would be an unnecessary personal risk.”

“The NHI reforms are still a way off, and delaying your medical scheme membership in lieu of the imminent NHI would be an unnecessary personal risk.”

– Barry Childs

The implementation of National Health Insurance in South Africa will have a material impact on medical aids – whether closed or open considers the benefits of both

The importance of outplacement in a world of redundancies

Losing a job is difficult, which is why outplacement services provide guidance, training and job-search strategies for those being retrenched, writes MADGE

GIBSON, head of The Change Initiative

As economies around the world struggle with slow growth, businesses will continue to reassess and restructure in order to stay afloat. It’s safe to say that the process of terminations, lay-offs, redundancies, retrenchments and career transitions will continue to be part of our commercial and personal landscapes for some time to come.

With HR sitting squarely on the front lines when it comes to terminations and the like, it is in for a tough time. Employee separations are never fun, fraught as they are with endless meetings, paperwork, consultations and stress. Having dealt with hundreds of HR executives over the years, I have yet to meet one who hasn’t described the process as physically and emotionally exhausting. However, a good outplacement provider can reduce the involvement of and strain on HR, enabling them to get back to business as usual faster.

FIGURING IT OUT

So, what is outplacement? Outplacement is an employer-sponsored benefit, typically provided as part of a severance agreement. It supports outgoing staff by reorienting them with the job market and associated activities, in order to secure new employment.

External outplacement firms work closely with impacted staff, providing an objective, confidential sounding board while steering them toward

focusing on their future (versus what they’ve left behind). Typical support includes career guidance, skills assessment, CV preparation, interview training and job search strategies.

There are many reasons outplacement is beneficial to the employee, but foremost is the fact that when someone loses their job, they also lose their source of income and their sense of security and personal identity, along with workforce comradeship. It is a painful, emotional and often devastating experience, not just for the employee but also their family.

Even the most educated or experienced candidates struggle with job loss. Self-doubt creeps in, fanning insecurity and eating away at self-confidence. These reactions are not unusual but can do great harm if not recognised and put into perspective by a skilful and trusted coach.

HUMANISING THE PROCESS

The COVID-19 period was a reminder that we need to humanise our processes. When it comes to terminating livelihoods, regardless of the very real facts behind the decision, it is personal. Facts and figures alone do not provide a complete solution.

Bringing employee welfare into the termination process matters. If terminations are not handled sensitively, the process can seriously damage a company’s reputation. In 2022, leading UK ferry company P&O Ferries fired 800 employees via a

External outplacement firms work closely with impacted staff, providing an objective, confidential sounding board while steering them toward focusing on their future.

pre-recorded video on SMS. The video was leaked on the internet, creating chaos for the company, including parliamentary intervention.

A WHOLE NEW WORLD

The job market isn’t as straightforward as it once was and presents challenges for most, regardless of status. Blue-collar workers will struggle to stand out in a sea of similar candidates, senior executives will have fewer options due to their age and/or price tag, and most job seekers don’t know how to compete in a highly competitive job market. There is much to be learned and many insights to be shared by outplacement professionals.

Even the job search process is vastly different from 10 years ago, especially taking into account new technologies, remote interviews, concise two-page CVs, job scammers, and the perils of applicant tracking systems – software used to select or reject CV applications before they even reach a human recruiter.

Navigating this new world can be overwhelming. The structured support provided by outplacement firms lessens panic, allowing the candidate to feel professionally guided through the process and able to confidently present themselves to the market.

Anyone transitioning out of their comfort zone into the intimidating world of unemployment deserves all the support they can get. The outplacement market offers a range of options, from pre-recorded e-learning apps and virtual support to programmes delivered in real time by career professionals. You will also find high-touch programmes that provide tailored, one-onone support designed around a candidate’s specific profession and industry. There are also programmes where candidates participate in group training sessions, benefiting from the insights and support of fellow participants.

Ultimately, a professional outplacement programme benefits the employee while limiting disruption to the business, and reducing potential litigation and reputational damage.

Madge Gibson

THE GREAT RETIREMENT CRISIS – WHY EMPLOYERS CAN AND SHOULD DO MORE

Data-driven insights suggest that the confluence of three global trends creates a heightened need and a unique opportunity for employers to help their staff along their journey towards financial freedom.

1. DEMOGRAPHIC SHIFT

The world is going through a profound demographic shift. Advances in medicine and the science and practice of wellbeing are resulting in people, the world over, living far longer lives than ever before, although not always in better health.

Concurrently, fertility rates – the average number of children born to a woman over her lifetime – have been declining globally.

Consequently, populations around the world are ageing, implying that the time individuals have to save relative to the time spent in retirement is falling dramatically.

In the 1950s, retirees might have expected to spend around 10 per cent of their adult life in retirement relative to 90 per cent working, but today, that ratio is closer to 50/50.

2. VOLATILE MARKETS

Markets are increasingly volatile. Recent regulatory changes have afforded South African investors unprecedented access to the immense opportunity provided by global markets. However, this has occurred alongside a global shift to defined contribution pension schemes, implying that most of the investment risk that comes with this access has been transferred to the individual.

As returns are less certain while risks prevail, investors face increased uncertainty when saving for their futures.

Finally, in South Africa, these trends are compounding with a well-documented and alarming retirement savings shortfall as many borrow to spend rather than earn to save.

More than nine out of every ten South Africans cannot afford retirement, with the country exhibiting average retirement replacement ratios well below those in developed economies.

More than half (53 per cent) of respondents in developed countries believe that social security systems have deteriorated, and only 26 per cent believe it had improved over the

decade, according to a comprehensive survey conducted by Credit Suisse.

That is not an encouraging result, but of more concern is that South Africans are the most pessimistic among the 16 countries surveyed, with 67 per cent of respondents having perceived a deterioration of the social security system over the decade and only 10 per cent having reported an improvement.

3. LOCAL DYNAMICS

When people don’t save enough, they not only suffer in retirement, but their dependants who then need to support them in old age, are also less able to save.

This creates a snowball effect that entrenches the “sandwich generation” phenomenon and has profound consequences for both the structure of society – by exacerbating inequality – and for the economy – by forcing many into states of chronic indebtedness, limiting their ability to invest in value-creating entrepreneurship.

Unsurprisingly, therefore, retirement concerns are highly pronounced among South African employees.

In South Africa, “while more than 80 per cent of people above retirement age are receiving a pension, replacement rates are very low and the country does not rank well with regard to future sustainability either, which helps to explain the pessimistic attitude”, states Credit Suisse.

A replacement ratio is a basic measure of retirement-income adequacy, calculated as the net pension entitlement to lifetime gross average earnings.

By the definition used by Credit Suisse, “for full-career workers and, assuming that individual earnings grow in line with average earnings, the replacement rate reflects pension income in relation to the last earnings”.

“In 2018, a South African with earnings equal to the national average (of $9 061 per annum), for instance, will receive a pension that would make up about 19 per cent of the last earnings,” Credit Suisse says.

This compares poorly to the 59 per cent replacement ratio – the average for the Organization for Economic Cooperation and Development (OECD) countries surveyed and the lowest of the countries surveyed.

“Most South Africans are not on track for a retirement they will be pleased with,” says Guy Chennells, head of product at Discovery Employee Benefits.

Three global trends are profoundly changing what it means to save for retirement, placing pensions systems across the world under pressure and increasing anxiety among employees. By DISCOVERY E MPLOYEE BENEFITS

When people don’t save enough, they not only suffer in retirement, but their DEPENDANTS who then need to support them in old age, are also less able to save.

Guy Chennells

On the contrary, “most are on track for a real problem in retirement”.

The key insight is that, as these trends unfold, employers are in a powerful position to do more.

EMPLOYERS ARE IN A UNIQUE POSITION TO DO MORE

While great strides have been made in reducing the cost of, and improving access to, retirement investing, evidence from behavioural economics suggests that it is people’s choices that have the greatest impact on their retirement outcomes.

This insight highlights the critical importance of incentivising and nudging behaviour change to help employees achieve their retirement goals.

Discovery’s shared value model for investing, for instance, provides real incentives of up to 15 per cent more money than a client puts in to encourage them to keep it invested until retirement. It also actively nudges and helps people to make incremental improvements towards their goals.

In a recent case study on a large financial services organisation that had driven awareness

More than nine out of every ten South Africans cannot afford retirement, with the country exhibiting average retirement replacement ratios well below those in developed economies.

of these features, Discovery found that members who had engaged with these features had dramatically higher preservation rates.

Members who had made a change to contributions were 50 per cent more likely to preserve, members with boosts to the value of more than R50 000 were 150 per cent more likely to preserve, and members who had simply opted into the boost programme and generated half of the potential monthly boost value were 48 per cent more likely to preserve. “These are incredibly exciting and signifi cant fi ndings,” comments Chennells.

“Each of those preservations represents someone who will now have a dignified retirement rather than the nightmare scenario in which many retirees find themselves.” Employers are in a position of great influence here.

The status quo is that most employers provide a basic retirement savings scaffolding, but that status quo has failed a generation of employees.

Without the tailwinds of high investment returns, and in the real context of South Africans emerging from a radically disadvantaged history, employers can and should do all that is within their power to provide employees with the tools and support to help them to make the decisions that add up to financial freedom one day.

For more information: 0860 222 999 www.discovery.co.za

Scan this QR code to go directly to the Discovery website.

PREVENTION IS BETTER THAN CURE, so best INSURE?

As dynamics around health and life insurance change, so insurers and employers need to prioritise plans that promote prevention rather than cure, writes D

ISCOVERY E MPLOYEE BENEFITS

Since its outset, life insurance and group risk has centred on the need to ensure that individuals and businesses are protected “in the event of x”. Should a member of staff experience an unforeseen medical scenario, such as a mental or severe illness diagnosis, disability, or death, it is essential that they, and their loved ones, are financially covered.

In a post-pandemic world, digitisation, alongside the proliferation of the internet of things and advances in data analytics, enables insurers to tailor products in real-time to individuals based on their behaviours.

As the interests of insurers, employer policyholders and insured employees align to create an ecosystem of wellness, the potential to share and protect the created economic

value compounds. Together, these trends are enabling insurers and employers to switch the paradigm to one that prioritises prevention as opposed to cure.

AS HEALTH SHIFTS, SO MUST INSURANCE

The last decades have seen a dramatic shift in the dynamics of human health.

In the 1970s, the primary causes of death and disability among populations were due to communicable diseases and medical complications related to, for example, early childhood and pregnancy.

Today, these medical risks have dropped in relevance, with noncommunicable diseases (NCDs) rising to become a global “epidemic” that presents an urgent threat to the wellbeing of individuals, families, communities, businesses, and health systems.

The World Health Organization (WHO) estimates that NCDs such as heart disease, stroke, cancer, diabetes and chronic lung disease are now collectively responsible for more than 70 per cent of all deaths worldwide.

Furthermore, medical concerns, such as back pain and migraines, and mental health diseases, such as depression and anxiety, are increasingly undermining people’s ability to live healthy, happy and productive lives.

Evidence of this is found in Discovery Group Risk data which has recorded dramatic shifts in claims. From 2012 to 2020, there was a 57 per cent increase in the incidence of mental-related disability claims and a 16 per cent increase in musculoskeletal-related claims.

While the incidence of these conditions then remained steady during the pandemic, albeit variable by industry, the effects of reduced screening have started to materialise, with the incidence of cancer-related deaths increasing by 12 per cent between 2019 and 2022.

The United Nations’ World Population Ageing Report 2015, reveals that, between 2015 and 2030, the number of older persons — those 60 years or over — globally is projected to grow by 56 per cent, from 901 million to more than 1.4 billion.

An estimated 1.3 billion people – or 16 per cent of the global population – experience a significant disability today, states the WHO.

“The key insight here is that the noncommunicable nature of modern causes of death and disability implies that they are increasingly related to lifestyle choices and the way people are living,” says Discovery Employee Benefits’ head of product, Guy Chennells.

If behaviour, more than chance and genetics, is the root cause of much of today’s health concerns, that opens a door to a prevention paradigm in employee wellness with manifold benefi ts for employers.

Wellness programmes and interventions not only work to minimise the likelihood of death and disability, but can also help to foster an active and energised work culture that ensures that a business’ most important resource – its employees – is protected.

A PARADIGM SHIFT IN GROUP RISK

With the twin shift in societal ageing and health occurring at a time of disruptive technological advancement, global consultancy fi rm McKinsey envisions that the life insurance industry will increasingly transition from the traditional “assess and service” model towards one based on “prescribe and prevent”.

One major tech-driven theme enabling this shift is the explosion of data derived from connected devices.

The real-time connectedness of equipment with sensors, such as wearable devices, for example, the Apple Watch, or home medical screening equipment, enables insurers to understand clients more deeply and to personalise insurance offerings accordingly while offering instant service delivery.

Moreover, they create the opportunity to inspire clients to be healthier.

“The proliferation of data and connected devices, particularly wearables, will continue to make it easier for life insurance companies to play an active role in shaping customer health – to everyone’s benefit,” claims McKinsey. “We believe these factors will motivate life and annuity providers to engage customers in the shared-value economics of healthy living to increase policyholder longevity,” it says.

“Shared-value life insurance products, such as Vitality, are in the vanguard.”

Where historically insurance has been predicated on the idea of providing cover in the case of an event – be it a motor vehicle accident or a medical scenario – technological advances are allowing the industry to shift into one that works to minimise the likelihood of such undesirable events from ever occurring.

The logic here follows the age-old adage: “prevention is better than cure”.

DATA: THE NEW FRONTIER OF EMPLOYEE HEALTH

While the global life insurance industry pivots towards offering insurance solutions tailored to the healthy behaviour of individuals, data analytics are creating new opportunities for companies to target employee interventions where they are most needed.

Discovery Employee Benefi ts works to integrate traditionally siloed benefi ts solutions across the dimensions of healthcare, retirement and group risk into a holistic suite of benefi ts that leverages decades’ worth of expertise, know-how, data, and intellectual property developed by the respective business units that make up the Discovery stable.

“With this integrated approach to delivering employee benefi ts, you get multiple data points for each employee. These enable you to identify the issues that are paramount at that employer,” says Chennells.

Deep data-driven insights at the level of the individual make it possible to identify industry and population trends – such as decreases in health screening and the effects of long COVID-19 – and to link those to specifi c trends identifi ed at the company level.

For example, at one large IT sector employer, Discovery identifi ed a signifi cant increase in hospitalisations due to mental health concerns and unusually high engagement in the Discovery Employee Wellbeing programme. Alongside a major drop in general and targeted screenings and a high degree of COVID-19-related deaths and hospitalisations, these trends not only placed a signifi cant toll on employees, but also resulted in signifi cant costs for the employer by way of increasing life insurance premiums. Beyond targeting interventions, integrated data helps drive preventative wellness programmes, such as Discovery’s Health is Wealth programme, which identifies those heading in a dangerous direction with regard to mental health and other noncommunicable disease causes and then helps them correct course.

For those who do succumb to an illness, Discovery’s Return to Health programme offers signifi cant incentives and the required assistance to help inspire individuals to return to work, faster.

“Data leads to more tailored interventions and more effective wellness programmes, and that leads to healthier, more productive, more present employees, and more stable insurance costs. This is shared value in action, delivering better outcomes for the employer and for employees,” concludes Chennells.

“The noncommunicable nature of modern causes of death and disability implies that they are increasingly related to lifestyle choices and the way people are living.” – Guy Chennells

Deep data-driven insights at the level of the individual make it possible to identify industry and population trends.

Slowing the brain drain

While the “brain drain” is not new – people have been leaving South Africa for greener pastures for decades – current challenges with infrastructure, service delivery and electricity have made it even more difficult for employers to attract and retain skilled workers.

“The best businesses focus on recruitment as part of their strategy,” says Steve Mallaby, CEO of adumo Payouts. “Companies need to find ways to stand out from the crowd to attract and retain the top talent.”

They can do so in a variety of ways, including the following:

Financial incentives

“Emergence Human Capital research from over 500 organisations shows the number-one reason employees leave a job is remuneration,” says Dr Pat Smythe, executive chair of Emergence Human Capital. “Employees don’t only leave when emigrating; they also leave to join other local firms. Fair pay retains employees for a limited amount of time. South African technically skilled workers are often lured by substantially higher-paid jobs overseas, as many of our technical skills are highly sought after.”

Mallaby says recognising top performers and incentivising them is an effective way to drive performance, increase employee engagement and retain talent. “Look for an incentive mechanism that provides payouts that sit outside employees’ salaries and bank accounts. Think of giving a payout card for birthdays, anniversaries or bonuses. This is much more tangible, drives a much higher level of instant gratification, and has the desired effect of engaging an employee with brand affinity.”

Incentives that recognise the employee as a person beyond their job are equally important, adds Mallaby. “Some corporates do long-term service awards, or some form of recognition on anniversary dates or birthdays. These simple recognition mechanisms make employees feel

special and valued by the organisation, which drives higher levels of retention. Employees who are happy and feel valued in their jobs and their roles are less likely to leave the company, and thus the country.”

Deferred retention bonuses are another strategy. These are annual bonuses paid in tranches, over a number of years – normally three. If an employee leaves before the end of the payment period, they forfeit that tranche. “Deferred bonuses accumulate each year so they can make a person think twice about leaving,” says Dr Smythe.

“Over and above all our other initiatives, we have a BHAG (big hairy ambitious goal) incentive that is a core key metric target,” says adumo Payouts chief of staff Clint Reis. “If we achieve it, everyone in the organisation gets an additional incentive, on top of everything else. We ask staff to tell us stories of how they contribute to the BHAG every month.”

Flexible working conditions

Some jobs are suitable for remote work, while others require the employee’s presence at the company’s premises. “Based on the nature of their role, some adumo employees are allowed to work from home,” says Reis. “At adumo, we have a grading matrix – measuring the likelihood of a decrease in productivity per role type – that clearly defines which roles can become work from home or hybrid, and which roles require the employee to work from office.”

Employers must manage this divide carefully, adds Reis. “Those employees who do need to work from office, according to our grading matrix, are further incentivised financially so that they get a similar benefit in terms of travel savings to those who work from home some or all of the time.”

Career development

Smythe says the second-most-cited reason for leaving a job is lack of career prospects. “It is vital that employees are informed about their career paths, and that they receive appropriate development to prepare them for future career prospects.”

Reis indicates that this is a requirement of the job at adumo. “All staff are expected to complete a minimum of 50 hours of continuous professional development (CPD) per year. CPD hours can be earned through mentorship, secondment, external and internal e-learning, traditional training and the like.”

“Companies need to find ways to stand out from the crowd to attract and retain the top talent.”

– Steve Mallaby

As

South Africa continues to struggle with the so-called “brain drain”, CARYN GOOTKIN asks what employers are doing to retain skilled workers

The culture question

Organisational culture is also fast becoming one of the main reasons people choose to leave a company.

“adumo has invested a lot into making its offices fun and hospitable places where our staff – aduCrew – want to be,” says Reis. “We are a purpose-based organisation that invests a lot of time in our vision, mission and values. At the heart of it, we believe that

A FOUR-DAY WORK WEEK?

beyond anything, our aduCrew will serve our customers and each other when they believe in the purpose behind what we do.”

Linked to organisational culture is management style. “Over the last 10 years, more and more employees have cited the leadership style of their superiors as the reason for leaving a company,” says Smythe. “Companies must train managers to manage not just the interests of the organisation, but

A four-day work week trial in South Africa is scheduled to begin this year, bringing with it both potential benefits and challenges. Benefits include improved work-life balance, increased productivity, reduced stress and increased employee satisfaction. Challenges might include increased costs, scheduling challenges and reduced coverage.

“I don’t think this is practical and responsible for the country as a whole,” says adumo Payouts CEO Steve Mallaby. “If we are to compete globally, and in light of the productivity challenges we already have, we can’t afford to move to a four-day working week.

“The initial cost of implementation will be high, as companies will have to invest in more labour or technology to cover the day that falls off from an employee’s roster. Also, customers’ expectations will need to be managed as the company reduces their hours. But the opportunities it offers are that new jobs could be created, and there would be less employee burnout and higher productivity.”

“Most companies currently work a 40-hour work week, so does a four-day week translate into ten-hour days?,” asks Dr Pat Smythe, executive chair of Emergence Human Capital. “Or is the work week reduced to 32 hours? And what effect does that have on productivity?”

Smythe says marginal businesses and small, medium and micro enterprises cannot afford to employ more people to cover the whole week. “So do they close down? And even if companies can afford to employ more people, often there are not sufficiently skilled people to fill those roles. The concept of a four-day work week is premature in this country and could impact inflation negatively, as the cost impact will be significant and may be passed on to the consumer.”

THE DOWNSIDE OF WORKING FROM HOME

Lockdown showed us the benefits of working from home – including not sitting in traffic, wearing comfortable clothes, and reduced petrol bills. “But it is harder to draw boundaries between work and personal life when working from home, so you ironically land up actually working longer hours,” says Dr Pat Smythe of Emergence Human Capital. “Many people also miss socialising with their colleagues and end up with mental health issues as a result. Organisations need to provide these employees with the requisite assistance.”

also their staff, to inspire them to perform at a higher level. Most executives don’t understand how to develop trust relationships with their staff to ensure they remain engaged. Many companies have adopted performance development plans, which look at how management can develop employees to perform better.”

This begs the question: How effective are these measures at retaining employees? While incentives may be enough to convince some employees to stay with a company, they are often not enough to overcome the larger systemic issues in our country that are driving the brain drain.

“To retain top talent, companies need to offer options: job rotation; shadowing and transfers to international branches or between cities,” says Smythe. “People are attracted to companies with optionality.”

Incentives are great for people who want to stay in the country, but have little effect on people who are thinking of emigrating, says Reis. “Brain drain is a macro problem, often fuelled by socioeconomic and political factors. People leave the country because they do not feel safe in their neighbourhoods. They leave the country because of crime. They leave the country for greener pastures and similar reasons. Rarely does one emigrate because of the office air-con wars, although in our office, they just might!”

“Companies must train managers to manage not just the interests of the organisation, but also their staff, to inspire them to perform at a higher level.” – Dr Pat Smythe

Testing for top talent

Psychometric

Finding top talent with the right skills to perform and the personality to thrive and fit in with a company’s culture and values is an ongoing challenge for organisations in the war for talent. How can hiring managers and talent acquisition specialists increase the odds that the talent they are recruiting is the best fit for therole, with the aptitude and resilience to accelerate business performance?

According to LinkedIn, 76 per cent of hiring recruiters say their biggest challenge globally is finding the right candidate for a role, and in the post-pandemic era, it has become even more difficult to find quality candidates.

Job performance is a complex combination of various components and work behaviours. It includes job-specific technical skills, the ability to work with others, levels of initiative and creativity, logical reasoning, adaptability, emotional intelligence, leadership and learning abilities, and responses to ambiguity and handling conflict.

It is difficult to pick up all of these critical components and behaviours quickly or objectively in an interview, by reading a CV, or by getting references from previous employers. To get these insights, companies large and small

rely on psychometric assessments as an effective and efficient recruitment tool that provides insights into a candidate’s cognitive abilities, personality, emotional intelligence, interest and integrity.

A DATA-DRIVEN VIEW

Around 75–80 per cent of Fortune 500 companies are reported to use psychometric testing in some capacity in their recruiting. Used correctly, psychometric tests can provide data-driven, objective and impartial views of candidates, while reducing the risk of bias and error in the selection and recruitment process.

“Psychometric assessmentshelp increase the probability of making a good hire. They give you

multiple views of the candidate. And they provide in the shortest amount of time insights that may not come out in an interview,” says Hofmeyr de Beer, MD of JVR Psychometrics, a division of JVR Africa, a distributor of psychometric tests in South Africa and sub-Saharan Africa.

According to De Beer, while there is no perfect predictor of workplace performance, psychometric assessment can greatly improve the odds of hiring the best candidate. It is a humanistic tool that can create lots of value in the recruitment process, as it is scalable and provides critical insights quickly. “There are no wrong profiles, just different ones. The primary objective is to help predict if that profile will be successful in a particular role and environment. The different tests complement each other, making the hiring process more effective and efficient.”

“We can look at a candidate’s risk and integrity, including covert and overt behaviours, values, interest and needs, aptitude and what motivates them, whether they are strategic or operational.” – Megan Carey-Wessels

Megan Carey-Wessels

testing is a critical tool to help companies to find new recruits who are the best fit for their organisation, writes VUKANI MAGUBANE

MEASURING AND OVERSIGHT

Psychometric tests measure cognitive abilities, learning potential, personality traits, and other attributes and skills relevant to job performance – including emotional intelligence and integrity. The results provide insight into a candidate’s strengths, weaknesses and overall suitability for a role.

“We can look at a candidate’s risk and integrity, including covert and overt behaviours, values, interest and needs, aptitude and what motivates them, whether they are strategic or operational,” says Megan Carey-Wessels, a psychologist and organisational development and wellness specialist at Orgro, a company that specialises in administering psychometric assessments, training and organisational development.

South Africa has some of the most stringent oversight on the use of psychometric testing in the workplace, to ensure that there is no bias or discrimination against any population groups. Because of the cultural diversity of the country and its history, there is more rigour to ensure fairness. Legislatively, the Employment Equity Act and Labour Relations Act provide policy guidelines for employers who use psychometric assessments.

The Health Professions Council of South Africa (HPCSA) sets the standards for the practice of psychology, and the use of psychometric testing falls under those standards. Only psychologists or psychometrists who are registered with HPCSA can administer the tests and give feedback.

DEVELOPED VS DEVELOPING WORLD TESTS

Bree Langenhoven, director and head of assessments at Encapsulate, says the company partners with clients to make better recruitment decisions and talent acquisitions by using different psychometric solutions tailored to specific needs. “It’s very important that the assessments are valid and scientific and are adapted to South African norms,” she explains. “South Africa is a developing country, and our context is quite different from that of developed countries. There is a level of bias that can exist from where the test was developed. Third- and first-world contexts are different, and when these tests come

to the South African market, they need to be checked and validated in accordance with local norms.”

A starting point in the process is for the consultant to understand fully the role they are assessing candidates for, the job objectives and requirements, the environment the role will be functioning in, the culture of the company and other nuances at play in the environment. A battery of assessments will be chosen that best suits the situation, and which can provide the company with a holistic view of all the candidates in a scientific way, without bias.

According to Langenhoven, psychometric tests measure the candidate’s alignment with the job specs for the position and the company culture, and can highlight potential risks through an understanding of the candidate’s strengths and weaknesses. If the company understands the risks they can make the right call, she explains.

“In interviews, people can say what you want to hear,” says Carey-Wessels. “Some people interview well, while others do not. Assessments are a non-biased appraisal of an individual. Psychometric tests can give a view of future behaviour based on behavioural competencies like persistence, a trait that is a factor in job performance. You are not going to be able to pick that up in an interview. Assessments give you scientific information on how candidate’s are going to behave.”

AVOIDING WRONG HIRES

While estimates vary on the cost of a wrong hire in monetary terms, lost productivity and replacement costs, there’s no doubt it can be expensive and disruptive. In today’s competitive and pressurised business environment, an effective and efficient recruitment strategy is a competitive advantage. With the right assessments, hiring managers get a scientific appraisal and evaluation of whether or not a candidate can actually do the job, has the resilience and creativity to meet the challenges, is low or high energy, has integrity, and is a good fit for the team. While personality tests measures preferences rather than skills, they can help

KEY QUESTIONS PSYCHOMETRIC TESTING CAN ANSWER

Psychometric assessments can help companies answer the following questions holistically so the best candidate is considered for a particular role, notes Bree Langenhoven of Encapsulate.

• Does the candidate have the cognitive ability to solve problems?

• Will they focus on strategic matters or be operational?

• Will their assertive personality be a plus or derailment in a particular environment, and how will they impact performance in a given situation?

• How emotionally intelligent are they?

• How do they manage conflict and complexity?

recruiters identify traits that make a candidate a good fit in a certain role within a company, for instance.

Langenhoven has been involved with assessments for a long time, and has seen them evolve and modernise with technological advancements. Most are done online, with systems built for candidates to click a link and take the test in their own time. The assessment comprises a set number of questions. Analysis of the results gleans in-depth information that can be sliced and interpreted to quantify who the best candidate is.

Psychometric testing, when used correctly and with other stages of recruitment, is a powerful tool and forms part of an efficient recruitment strategy to hire top talent. When applied correctly, cognitive and personality tests can increase the likelihood that new employees will succeed and contribute to departmental or company goals and objectives. The tests offer some scientific credibility and objectivity to the recruitment process. Fair recruiting should be highly objective, and using data-driven comparisons among candidates can reduce hiring bias and improve talent diversification. Using analytics can result in better and smarter sourcing and informed hiring decisions.

“The most important aspect is the feedback,” concludes Langenhoven. “No two assessments are the same. It is important for the consultant to communicate the results to managers. The value is in the conversations with the hiring manager.”

“THIRD- AND FIRST-WORLD contexts are different, and when these tests come to the South African market, they need to be checked and validated in accordance with local norms.” – Bree Langenhoven

Bree Langenhoven

How South Africa can fill its skills gap

Every year in South Africa, hundreds of thousands of young people leave secondary schools and tertiary institutions with high hopes of finding a job. Only a few are successful. According to Stats SA, the youth unemployment rate (ages 16–24) in the country has increased to a staggering 64.18 per cent, its highest level since records began.

South Africa is facing a serious mismatch between the types of skills it produces and what it increasingly needs. Citing the World Economic Forum’s Global Competitiveness Report, PwC reiterates what many people know: droves of South African high school, college and university graduates simply do not have the skill sets required to be competitive in a global context.

These are deep challenges for a developing nation. All players in society, not least of all the private sector, have a major opportunity to help create these skills. High unemployment is a ticking time bomb, meaning that solutions must

be delivered at scale. To escape the threat, the only way to position skills delivery is within a digital framework, to ensure no one is left behind.

Digitally enabled

Hiring companies all over the country want to see better candidates. They understand that the skills of the present and the future must be digitally enabled. Is a company even relevant if it does not realise this?

Reversing rising levels of unemployment and poverty in South Africa depends on how rapidly digital training and skills development programmes can be rolled out.

There has recently been encouraging, but limited, evidence of schools and universities doing their part to correct curricula and help make graduates more employable. But for the sake of urgency, now is the time for privatesector firms to step up, because South African businesses are not receiving a steady supply of the digital skills needed to compete and thrive.

Local school leavers have all the passion and potential required to learn and grow. What they need is a pathway to acquiring the right skills. Reversing rising levels of unemployment and poverty in South Africa depends on how rapidly digital training and skills development programmes can be rolled out.

Taking the creative economy as an example, it is clear what can be achieved when restless graduates are given world-leading tools to develop their ideas and monetise them. Adobe, a globally trusted and recognised brand, said recently that more than 165 million people have joined the creator economy since 2020. This is exactly in line with what organisations like the World Economic Forum are saying – that crucial future job skills will include creativity, originality and initiative.

Digital solutions, like Adobe’s array of software tools for creative expression and secure document creation, are empowering former outsiders to start their own companies and industries, based on cutting-edge creative content. Digital tools can offer so much more, like monitoring and control mechanisms to allow for quicker project productions, fostering worldclass content, giving innovative ideas a voice, and rolling out easy and convenient tracking of workflows.

Unlocking South Africa’s digital potential

Our nation needs to be able to create a wave of digitally adept young people who can communicate in content-rich, impactful messages that will empower and unleash their creative potential – on a global scale. They must be equipped with creative, design, presentation and communication tools to foster creative ideas and work.

Learning Curve, as a locally based platinum Adobe reseller with coveted Edu Elite Status, has already done notable work in bridging the digital literacy gap by providing software training material. Using Adobe as an instantly recognisable brand, South African companies can leverage the global scale of Adobe’s education programme and product leadership.

Learning Curve provides world-class technology that is designed and tested to get the best out of teams, empowering them to hone their own creative voices. We believe such partnerships are vital as a way of better leveraging digital tools to help solve South Africa’s unemployment crisis.

High unemployment is a ticking time bomb for South Africa, so positioning skills delivery within a digital framework is vital to ensure no one is left behind, writes DANIEL SMITH, sales and operations director at Learning Curve

Financial planning services for employees are vital

Decreasing absenteeism and distracted workforces: When workers are stressed about their finances, they can suffer from health issues that include anxiety, depression, inability to focus, poor judgement and recurrent illness, all of which can lead to them missing work.

customised to the specific needs of different employee groups. This is done with the aim of helping employees ease their financial burdens and improve their financial wellness.

For many South African employees, money is the number-one source of stress. That’s why employers have an important role to play in providing the guidance and resources their staff need to make better personal financial decisions and secure their financial futures. The benefits of doing so far outweigh the costs.

Employers aren’t obligated to provide financial advice in any way, but growing numbers of companies are arranging financial wellness programmes to educate their workers about debt, investing and planning for retirement.

Providing financial planning services is a win-win situation for both employees and employers. When employees have access to financial advice and education, they’re more in control of their own destinies and are far less stressed. For employers, it means they have far healthier, more productive employees, which has a major impact on productivity, staff turnover and the bottom line.

The benefits to a company of offering financial planning as an employee benefit include the following.

Attracting talent and reducing staff turnover: Adding financial wellness benefits to an employment package is an attractive benefit for existing and future employees alike.

Improving work performance and productivity: By the same token, workers who can focus on their jobs instead of worrying about money troubles are more engaged, innovative and productive at work. Happy employees have better mental health.

Better morale: Employees who feel that their employers care about them have better morale and job satisfaction.

To ensure their employees get the right kind of financial advice, employers should work with reputable financial planning and employee benefits companies that provide unbiased advice and do not only want to sell products for commission. Some companies even provide basic advice for free, or incorporate it into their model on regulated income.

It’s important to choose the right employee benefits firm that can tailor products and services that are best suited for your employee base, and that is passionate about giving your employees the best advice based on their individual circumstances.

The role of HR HR plays an important role in the provision of financial planning services in any business. With employee well-being, satisfaction and productivity top of the corporate agenda right now, HR can create financial literacy training programmes

With employee well-being, satisfaction and productivity top of the corporate agenda right now, HR can

There are several actions HR departments can take to encourage smarter money moves by their employees. One is to arrange financial wellness days, where they get experts in to share insights and education with employees. It is also vital to do proper member on-boarding and exiting with the right financial professionals, and to ensure retirement benefit counselling is in place for employees nearing retirement.

When a staff member leaves your organisation, encourage them to seek expert financial advice around withdrawing their retirement funds. One of the biggest reasons South Africans don’t have enough retirement funds is that they cash in their pensions when they change employers instead of preserving the funds.

Despite companies’ efforts to foster open communication around financial wellness, many financially stressed employees are embarrassed, or hesitant, to be seen asking for help with their finances. This is where digital platforms are coming to the fore, giving workers access to unbiased, relevant content and offering a level of privacy that they don’t get from open workshops or presentations.

NMG’s SmartAlec is a good example: this is an easy-to-use artificial intelligence tool, powered by FinEazy, that bridges the gap between financial products and people via an intuitive WhatsApp chatbot. Influenced by gamification design principles, the tool supports financial literacy through storytelling, engagement and conversational learning.

Furthermore, the WhatsApp chat experience is designed to offer a range of educational financial courses, encompassing Basic Finance 1 and 2, Retirement, Insurance, Healthcare and Advanced Retirement Fund.

create financial literacy training programmes customised to the specific needs of different employee groups.

Kinola Pather

Companies that focus on providing financial wellness services to employees inevitably have happier, more productive staff than those that don’t, writes KINOLA PATHER , head of strategic marketing at NMG Benefits

PRACTICAL IMPLEMENTATION OF DIVERSITY AND INCLUSION IN SOUTH AFRICAN CORPORATES

What diversity and inclusion is really about in a South African context.

By XOLANI NGAZIMBI, associate director, Transcend Corporate Advisors

The last two years have seen the South African economy reeling from the impact of a number of socioeconomic challenges including, but not limited to, a global pandemic and more recently, an escalating electricity crisis.

These challenges have contributed to a decrease in the quality of life, with a substantial impact on how South Africans are able to show up or feel included in the workplace. The subsequent impact on employee engagement and mental health and the lack of recognition of the value and contribution employees bring can all present business risk.

Studies have long demonstrated the benefits of diversity and inclusion (D&I). These range from increased employee engagement, innovation and productivity to facilitating an inclusive and collaborative work culture.

To reap some of these benefits, the socioeconomic landscape requires people managers and human resources (HR) professionals in South African companies to go beyond compliance and interrogate the role of D&I, and re-imagine the implementation of impactful D&I strategies in the workplace.

Working together to help employees overcome challenges

Embracing D&I in a South African context is not only about meeting compliance targets, but also recognising that employees come from all walks of life. It is also about intentionally working to mitigate the impact of the unique challenges they face in their day-to-day lives.

A practical example of what this looks like in a world where personal and professional lives increasingly revolve around load-shedding schedules is making loans available for staff to install electricity

inverters in their homes. While some have gone this route, alternative power sources are still an unattainable cost for most. The benefits, however, are life-changing:

• When necessary, employees can work from home without disruption.

• Employees experience increased wellbeing when some of the burdens of the disruption of power outages are alleviated. There are also benefits for the employer –engaged employees with less stress are better able to focus on productivity. They can also show up consistently during working hours to complete their tasks to the best of their ability.

IMPLEMENT A MEANINGFUL D&I STRATEGy

It is incumbent on employers to ensure that the company’s D&I strategy makes employees feel valued and empowers them to succeed in the workplace. This means identifying creative and innovative strategies to address socioeconomic challenges.

Some strategies to implement include:

1. Getting to know your employees. Surveys are a powerful tool to gain insight and understand how employees are experiencing the negative impacts of some of society’s challenges.

2. Offer workplace fl exibility. The challenges we have witnessed of late require a more fl exible style of working. From the pandemic to load shedding and the various protests cropping up in response to the escalating cost of living. Flexible working arrangements and adjusted schedules can go a long way in helping employees manage their work obligations and avoid feeling disconnected.

Embracing D&I in a South African context is not only about meeting compliance targets, but also recognising that employees come from all walks of life.

3. Enhance D&I intelligence throughout the organisation. D&I should not only be the ambit of HR professionals and leaders; inclusion can also be facilitated through awareness raising. Facilitated D&I workshops allow colleagues from different backgrounds to engage in conversation to broaden understanding, increase awareness and influence behavioural change. By prioritising D&I and driving innovative strategies to address the impact of socioeconomic challenges around us, South African companies can demonstrate commitment to a more equitable and just society. At the same time, the companies can build inclusive workplaces where employees feel valued and, ultimately, drive sustained productivity.

Scan this QR code to go directly to the Transcend website.

For more information:

011 442 2433

info@transcend.co.za

www.transcend.co.za

that plays a vital role in building a more competitive business.

With automated technologies increasingly picking up compliance and administrative work, HR is at last finding itself empowered to focus less on processes and more on people. This is why we are seeing many companies rebrand HR as the “people” or “talent” function – because the reality is that its core function is all about finding the best people, ensuring they have a great workplace experience and helping them unlock their full potential.

It goes without saying that it is the progressive businesses that clearly understand they will attract and keep the best people – and get the best out of them – by offering a healthy company culture and an engaging workplace experience. When it comes to nurturing this environment, HR has a vital role to play by partnering with the business to engineer rewards, incentives, career paths and training opportunities that help people be their best.

Is it time for HR to rebrand?

Over the past few years, the ways people think about work and employers think about employees have shifted dramatically. We have emerged from a public healthcare and economic crisis with a renewed appreciation for the central role of people in business.

What’s more, HR departments are realising that top talent is more mobile than ever. In a competitive world, the organisations that are most effective at attracting, developing and retaining the best people will clearly obtain a competitive edge. Yet despite this reality, there are widespread perceptions that HR is all about pushing paper and filing reports.

Forward-thinking HR departments understand it’s vital to challenge these perceptions. Sage’s new global research, The changing face of HR in 2024, finds that 91 per cent of HR leaders say the profession has changed dramatically over the last five years. However, only 39 per cent of these leaders think employees know what HR does.

For this reason, more HR professionals are questioning whether the term “human resources” is the right description for what they do. In our research, 73 per cent of HR leaders and 85 per cent of the C-suite agree that the term is outdated. The study signals that now could be a seminal moment for the function, suggesting that we have reached a point where it is appropriate for HR to undergo a major rebrand.

What’s in a name?

A cynic might ask how much difference a name can really make. But the reality is that talking about humans as resources is an outdated way of approaching the subject, as it utilises the dehumanising language of the Industrial Age. It creates the perception that HR is all about compliance, administration of hirings and firings, and cost optimisation. Today, however, HR is a strategic business function

Stewards of information

In addition to this, it should be remembered that in a digital world where data is considered the lifeblood of a business, HR is the steward of a potential goldmine of business information. Insights into absenteeism, overtime, employee attrition and retention, skills availability, and employee well-being, engagement, and satisfaction can play a significant role in helping the business to make smart decisions as it grows. It should thus be clear that HR deserves a seat at the decision-making table where important resolutions are made. For many years HR leaders have been the unsung heroes of organisations, but as the focus has shifted from processes to people, these leaders have begun to demonstrate their influence, visibility, agility and impact more than ever.

Ultimately, rebranding the HR function in this context is not merely about a simple name change. It is in fact a way to highlight the vital role that HR plays in helping people and businesses reach their growth and development targets.

HR has a vital role to play by partnering with the business to engineer rewards, incentives, career paths and training opportunities that help people be their best.

A recent study conducted by Sage indicates that HR’s focus is shifting from processes to people, writes SONIA TSHABALALA , regional people director for Sage AMEA

Sonia Tshabalala