Call for employers to assist workers to save
• Savings Month designed to remind consumers to strive for financial freedom, writes Alf James
The month of July is Savings Month in SA, a campaign led by the South African Savings Institute (SASI) and supported by Absa and the Industrial Development Corporation (IDC), with a focus on driving awareness around savings issues that contribute to the financial wellbeing of the South African consumer.
In the quest to find alternative financial solutions for SA’s dire savings rate, this year the spotlight falls on how employers can play a vital role in assisting cash-strapped consumers to save.
WORKSHOPS
The topic was discussed by a panel of experts on June 27 at the launch of July Savings Month, hosted by SASI Savings Ambassador, businesswoman and media personality Azania Mosaka. The 2018 SASI July Savings Month Community Campaign will take the savings campaign to grassroot communities, stokvels and tertiary institutions. SASI will hold workshops during July in various communities and at tertiary institutions.
“As South Africans struggle under increasing financial pressure, a savings buffer becomes even more important, yet there is less focus on savings and people are increasingly using credit to fund event their basic needs, getting caught in a vicious spiral of debt from a young age,” says SASI CEO Gerald Mwandiambira.
“For those who can save, it is important that they use all the instruments available to improve their long-term financial sustainability.”
Mwandiambira says saving money is essentially a behavioural change, and this is behaviour employers and HR professionals can help guide.
“HR professionals should be educating employees to start building a savings buffer and recommending tweaks such as regularly reviewing and adjusting their pension fund contributions. Employers can more actively facilitate or automate the savings process for those with an income, such as garnish savings options where money goes into tax-free savings accounts and structuring 13th cheques as a savings tool.”
Collaboration with partners across all industries, even beyond financial services, is necessary to address savings in SA, says Mwandiambira.
“The lack of a savings culture in SA is a systemic developmental issue, and no single organisation holds the resources — financial, intellectual or skills — to address a problem of this magnitude on its own. Collaborative efforts from active corporate citizen companies such Absa have the potential to deliver results on a bigger scale,” says Mwandiambira.
According to Thami Cele, head of Savings and Investments at Absa Retail and Business Banking, research shows that there are clear benefits for employers as financially stable employees tend to be happier and more productive. “We know that savers with a savings buffer of up to three months’ income enjoy improved emotional wellbeing, greater resilience to external market shocks and, importantly, an increase in productivity at work.”
RESEARCH
Research commissioned by Absa to uncover the interplay between savings and happiness will be launched to the market during August 2018.
Mwandiambira believes that we need to move away from negativity around this county’s savings rate to developing innovative savings alternatives and reinforcing positive savings behaviour.
“Savings Month has been designed to remind consumers to strive towards financial freedom or remain continuously vulnerable. Cultivating a culture of savings and promoting alternative savings solutions in all spheres remains the focus of SASI and our dedicated partners.”
THERE ARE CLEAR BENEFITS FOR EMPLOYERS AS FINANCIALLY STABLE EMPLOYEES TEND TO BE HAPPIER AND MORE PRODUCTIVE