Why employee benefits shouldn’t be a dying trend

Jun 28 2017 06:00
employee, work

The rise of the “gig economy” – relatively new in South Africa but growing fast – is transforming the employment landscape. This trend towards independent contracting, rather than formal employment, and the simplicity with which the internet and apps can connect those in need of a service to those who offer it, is turning some industries upside down.

However, there are concerns about this development in the labour market. Progressive changes to legislation globally and in South Africa over the last 100 years or so, , have sought to protect workers by ensuring that their employers give them paid time off to be sick, to have children and to rest – and to ensure basic standards of financial health while at work and after they retire. Research conducted by Momentum backs up the notion of the value to companies in caring for their employees – it’s as much a benefit to their bottom line as it is a moral issue.

In the case of the “gig economy” worker of the future, they could opt to have the “employer” or contractor pay a percentage of their fee into a “security” or benefit account for them. What is absolutely certain, however, is that in the absence of legislation and best practice in this growing part of the labour market, workers who do not make sure that they are covered for necessary health, retirement and insurance benefits run the risk of becoming a cost to their families or, ultimately, to the state itself. 

Of course, financial services companies such as Momentum offer healthcare, retirement and insurance benefits for individuals regardless of whether they are formally employed or work for themselves. Momentum’s retail solutions for individuals would work well for people working in the gig economy who have an irregular stream of income from various sources.

However, the idea of full-time employment and the associated benefits still works well for the majority of employers and employees. Ultimately, all employers want a healthy, happy, well-rested workforce - and providing retirement, insurance and wellness benefits to employees as a part of their package goes a long way to ensure this. Group employee benefits and the financial services companies that manage them, such as Momentum, can help companies of any size, corporate and SME’s, to reach the goal of well cared-for staff.

MMI, the holdings company of Momentum, has established South Africa’s Effective Employee Index, a study that shows quite clearly how employees with better Financial Wellness are notably less prone to absenteeism and “presenteeism” – the tendency of being at work but not being engaged and productive. Further, many studies have shown the damage that disengaged employees can do to companies. Momentum’s research suggests that unproductive employees cost South Africa up to R70 billion annually, so helping employees to increase their Financial Wellness is a significant tool companies have to avoid this problem.

Another key finding in MMI’s Effective Employee Index was the very clear interplay between the financial and medical wellness of employees. One tends to lift the other, and vice-versa. The study concludes that physical health and financial wellbeing are key drivers of employee productivity, once more underlining the importance of group employee benefits such as retirement, insurance benefits like disability cover, health and wellness benefits.

How workers in the “gig economy”, those who employ them, those steering public policy and pension fund managers get together to address the new trend will be fascinating – and absolutely critical to the health of a nation as the labour market changes. In the meantime, Momentum has your employees – and therefore your bottom line – covered.

Momentum FundsAtWork addresses the urgent need for affordable employee benefits packages for employers, even if their employees are low income earners. FundsAtWork allows employers to craft a solution that would best suit the specific needs of their employees – from retirement, to funeral and insurance benefits. Make your employees happy and healthier by giving them the benefits that they deserve. FundsAtWork Core has been specifically designed to enable low-income earners to get on their road to Financial Wellness. Over and above the retirement and insurance benefits it offers, the features also includes no high fees, an answer to poor financial literacy, the ability to build on the benefits once a solid foundation is in place and free access to health expertise and rewards. 



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