South African em­ploy­ers should en­cour­age em­ploy­ees to be­come fi­nan­cially lit­er­ate

Mail & Guardian - - Irfa - Alf James

South Africa has one of the worst sav­ings rates in the world, ac­cord­ing to statis­tics re­leased by the South African Re­serve Bank, which found that the coun­try’s sav­ings rate is only 15.4% of GDP — far be­low the de­sired rate of 25%.

Busi­nesses should be look­ing at how they can as­sist their em­ploy­ees with be­com­ing fi­nan­cially lit­er­ate, ac­cord­ing to Lyndy van den Barse­laar, Man­pow­erGroup South Africa’s man­ag­ing di­rec­tor.

“South African em­ploy­ers should def­i­nitely in­te­grate fi­nan­cial ed­u­ca­tion and train­ing into their em­ployee re­la­tions strate­gies. This be­comes even more pru­dent as the coun­try has just moved into a re­ces­sion,” says Van den Barse­laar.

Statis­tics com­piled by debt man­age­ment firm Debt Res­cue (2016) show that South African con­sumers owe the bulk of their monthly salaries to cred­i­tors.

Only about 23% of South Africans have funds avail­able at the end of the month, while the other 77% are left flat broke, with no hope of sav­ing any money. More than 11 mil­lion of South Africa’s credit ac­tive con­sumers are de­scribed as over-in­debted.

In­di­vid­u­als with a low de­gree of fi­nan­cial lit­er­acy tend to bor­row more, ac­cu­mu­late less wealth, and pay more in fees re­lated to fi­nan­cial prod­ucts.

“Deal­ing with fi­nan­cial stress and wor­ries about debt has been known to cause de­pres­sion, anx­i­ety and even lead to sui­cide in ex­treme cases. Em­ploy­ers should be tak­ing this se­ri­ously, as em­ploy­ees are the most im­por­tant as­sets to any busi­ness,” says Van den Barse­laar.

She en­cour­ages busi­nesses to build fi­nan­cial lit­er­acy ed­u­ca­tion and train­ing of some sort into their em­ployee re­la­tions strate­gies.

Some of the meth­ods by which or­gan­i­sa­tions can pro­vide ed­u­ca­tion and train­ing on fi­nan­cial lit­er­acy in­clude vol­un­tary classes, news­let­ters, emails, work­books, on­line re­sources, cour­ses, or even con­sul­ta­tions by third par­ties such as an or­gan­i­sa­tion or in­di­vid­ual who op­er­ates within the fi­nan­cial ser­vices space.

“Not only will this bode well for the em­ployer as their work­force will be fi­nan­cially lit­er­ate and on the path to fi­nan­cial se­cu­rity and free­dom, it will also bode well for each of the em­ploy­ees – and there­fore for the economy at large,” ex­plains Van den Barse­laar.

By tak­ing the lead in help­ing their em­ploy­ees learn to make bet­ter fi­nan­cial de­ci­sions, em­ploy­ers are play­ing a big­ger role in build­ing aware­ness around fi­nan­cial well­ness, re­tire­ment, sav­ings and in­vest­ment plan­ning.

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