Should com­pa­nies pro­vide em­ployee ben­e­fits such as life cover and re­tire­ment fund­ing for their staff?

CityPress - - Business -

Re­cently, the man­ag­ing di­rec­tor of a small com­pany asked me if I thought they should pro­vide em­ployee ben­e­fits such as life cover and re­tire­ment fund­ing for their em­ploy­ees. Cur­rently, the com­pany leaves that en­tirely to each em­ployee to sort out for them­selves.

Given the cost and ad­min­is­tra­tion im­pli­ca­tions, small and even medium-sized com­pa­nies are re­luc­tant to of­fer any em­ployee ben­e­fits, choos­ing to leave those de­ci­sions up to their em­ploy­ees, yet a re­cent FinS­cope sur­vey found that when it comes to life cover and re­tire­ment fund­ing – un­less a com­pany was pro­vid­ing manda­tory cover – in­di­vid­u­als were un­likely to have suf­fi­cient cover in place.

So, my re­sponse was that I thought the com­pany was car­ry­ing a ma­jor li­a­bil­ity by not pro­vid­ing for its em­ploy­ees. Sta­tis­ti­cally, it is un­likely that many of his em­ploy­ees have made suf­fi­cient pro­vi­sion for them­selves and, ul­ti­mately, the fam­i­lies of the em­ploy­ees have some ex­pec­ta­tion that the com­pany will pro­vide for them.

What hap­pens when one of his em­ploy­ees, who has worked for him for 15 years, is in a car ac­ci­dent and un­able to work again?

Or is killed in that car ac­ci­dent, leav­ing a fam­ily – in­clud­ing young chil­dren – fi­nan­cially des­ti­tute? Or what hap­pens when the em­ployee re­tires and has noth­ing to live on ex­cept a state pen­sion? How would he – as head of the com­pany – feel?

Iron­i­cally, it would be eas­ier for a large or­gan­i­sa­tion, which is more likely to have em­ployee ben­e­fits in place, to wash its hands of the sit­u­a­tion and point the dis­abled em­ployee or wid­ower to the em­ploy­ment con­tract.

It would be much harder, emo­tion­ally, for the head of a small com­pany who would have worked closely with the em­ployee and per­haps met his or her chil­dren at Christ­mas par­ties to take the same line.

As a de­cent hu­man be­ing, he would feel obliged to of­fer as­sis­tance, and that for me is where the li­a­bil­ity is de­rived. It would be a re­spon­si­bil­ity born out of emo­tion rather than le­gal­ity.

The flip side to this con­ver­sa­tion is to you, the reader: If your com­pany is not pro­vid­ing pro­tec­tion or re­tire­ment ben­e­fits, are you do­ing any­thing about it? And, if not, does your fam­ily know that should some­thing hap­pen to you, there is nowhere for them to turn to?

Would you pre­fer your com­pany to deduct money for life cover and re­tire­ment, or would you pre­fer to have a higher take-home pay and do it your­self?

SMS us on 35697 us­ing the key­word COVER and tell us what you think. In­clude your name and province. SMSes cost R1.50

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