Our nation is faced with a challenge: a shockingly low savings rate of just 0.5%. Deloitte South Africa's recent findings shed light on the income households, businesses, and governments save instead of spending in our economy. This indicator reflects the health of our nation's finances and provides insights into future investment trends. However, this data barely scratches the surface.
Many South Africans need help to keep their budgets out of the red in our current economic climate. The rising cost of staple foods along with the increased costs of everyday living make it especially difficult for most households to survive, let alone save. Sadly, those earning in the low-income bracket, who make up most of the workforce in South Africa, are especially hardest hit as they often rely on debt to make ends meet. Ultimately, the only lasting way to get out of debt is to change the way you think about and spend your money.
National Savings Month
The Savings Institute of South Africa has designated July as the annual National Savings Month, which provides employers with an opportunity to not only remind cash-strapped employees about the importance of saving but also to provide help that will benefit them both now and in the future.
Savings month challenges consumers, to strive towards living within their means, and to reinforce positive financial behaviour. Research has shown that more than 80% of middle-income consumers with monthly earnings between R15 000 and R42 000 have no or limited savings. You can only imagine how hard it must be for that earning in the low-income bracket to save.
To help South African consumers during the global financial crisis, consumer protection agencies have come together to encourage a saving mindset. Their goal is to improve the financial health of all South Africans by promoting the habit of saving.
How to support your workers' financial health journey?
As an employer, you can greatly impact and change the course of not only your employees but also their families' lives. By investing in your employees' financial health, you contribute to their overall happiness, engagement, and productivity in the workplace.
It's important to consider a holistic approach by incorporating a variety of strategies. Here are some ideas that you can implement to support your workers:
Encourage budgeting and financial planning: Provide resources and workshops on budgeting techniques, saving strategies, and financial goal-setting to help employees gain control over their finances. You can invite registered financial organisations like Picsa to help your workers with this and to present an interactive workshop.
Offer financial education and literacy programs: Collaborate with financial experts or partner with organisations like Picsa to provide educational sessions on topics such as debt management, investment planning, and understanding financial products.
Provide access to financial tools and resources: Offer employees access to financial management apps, online calculators, and resources that can assist them in tracking expenses, setting savings goals, and making informed financial decisions.
Implement workplace savings programs: Establish employer-matched savings programs or retirement plans that encourage employees to save for the future and provide them with a sense of financial security.
Offer affordable loan options: Explore partnerships with responsible financial institutions or companies like Picsa to provide low-interest loans or emergency funds for employees facing unexpected financial challenges.
Promote employee wellness programs: Recognise the link between financial stress and overall well-being. Consider offering employee wellness programs that address financial health, such as stress management workshops or employee assistance programs.
Foster a supportive and inclusive workplace culture: Create an environment where employees feel comfortable discussing financial concerns and seeking advice. Encourage open communication and provide avenues for employees to seek guidance on financial matters.
By partnering with Picsa, a commercial financial health company dedicated to the financial health of low-income workers, you can help reshape the financial trajectory of your employees. Picsa is a partner to employers to help them support their workers’ financial health.
What does Picsa do?
At Picsa, we believe that all South Africans should have access to financial products such as emergency savings, short – and long-term investments, affordable funeral plans, and responsible financial loans. We tackle the financial needs of South Africa’s majority labor-intensive workforce through our value-for-money products, practical education, and meaningful rewards.
