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Using Financial Wellness Offerings to Boost Employee Retention

November 3, 2022

For a good reason, financial wellness programs are booming in the workplace. Studies show that when a company offers employees access to reliable, affordable financial services, it positively affects employee retention. In an increasingly digital and connected world, employees need access to more than just basic financial services — they need access to the right financial services at the right price points. Financial wellness programs can ensure this by offering accessible savings options and loan products that target their specific needs. This article will focus on the benefits of employee financial wellness programs in South Africa and how they can help retain employees.

What are financial wellness programs?

Financial wellness programs (FWHPs) are an addition to standard employee benefits and go beyond retirement planning and investing information. It promotes the accurate understanding and proper application of money to maximise the likelihood that the employee will develop a healthy relationship with their money and establish stable, fulfilling, and satisfying personal finance scenarios at home and work, now and in the future. 

In South Africa, employers can provide various financial wellness programs to employees. Employers can give access to financial wellness programs through your payroll provider, through an employer-specific program, or as part of a corporate wellness program. 

There are a few key things you should keep in mind when deciding what type of financial wellness programs your company should offer to employees. First, you should assess what benefits employees are asking for. Next, you should determine which financial wellness provider your company can afford to partner with. Like all benefits, they come at a cost. Finally, it would be best if you determined whether your business can effectively market and distribute financial wellness programs to employees. These considerations will primarily affect the type of program you decide to offer.

The benefits of financial wellness programs

Increased savings rate

When employees have access to reliable financial products, like low-interest savings accounts and access to credit, they’re more likely to save for retirement. This can help improve your company’s financial health and increase its long-term viability.

Reduced risk of financial stress

Financial wellness programs can help employees manage their finances and avoid financial stress. Providing low-interest products and affordable access to credit can help them avoid risky behaviours that could affect their credit ratings and cause them to lose valuable benefits, like health care or retirement benefits.

Increased future earning potential

Financial wellness programs can help increase employees’ earning potential by providing access to various financial products and services, like credit. These include car loans to mortgages, which can help employees boost their net worth and unlock economic opportunities that could help them with future financial goals.

Why is it so important to retain employees?

Employees with access to reliable, affordable financial products are more likely to stay with your company. This can help boost your financial health and increase the long-term viability of your business. It can also help reduce the risk of financial stress in employees’ lives, like the feeling of economic pressure from paying unexpected costs like medical bills. For employees with access to reliable financial products, this financial stress is less likely to impact their day-to-day lives. Instead, it’s expected to cause them to seek help from their employer, like a company’s financial wellness program.

The three ways a financial wellness program boosts retention rates

Employee retention is vital to the overall health of any business, both in terms of profits and stability. Studies show that employees are more likely to stay on the job when a company offers access to reliable financial products. That means the benefits of providing financial wellness programs to your employees include the following: 

  1. Lower healthcare costs – A growing number of employers are offering their employees health savings accounts (HSAs). These accounts offer tax-free savings that can help cover out-of-pocket medical expenses. 
  2. Reduced risk of financial stress – Providing employees with low-interest products and affordable access to credit can help them avoid risky behaviours that could affect their credit ratings and cause them to lose valuable benefits, like health care or retirement benefits. 
  3. Increased future earning potential – Providing employees with access to a range of financial products and services, like credit, can help boost their net worth and unlock economic opportunities that could help them with future financial goals.

Conclusion

The internet and the rise of digital technologies have made it easier for employees to manage their finances. However, it’s still vital for them to have access to reliable financial products. That’s where financial wellness programs come in. FWHPs can help boost employee retention, improve a company’s financial health, and help employees manage their finances by providing access to various financial products and services, like credit.

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Helping your employees get rid of the burden of debt.

July 25, 2022

Productivity loss in the workplace can be attributed to employees’ distress over personal financial issues. If you care about your employees’ wellness, you should also care about their financial well-being. Assisting employees with their financial well-being is beneficial for company culture and the overall productivity of a company. 

According to the 2015 Global Findex report from the World Bank, 86% of South Africans took out a loan to cover day-to-day costs. This translates to over-indebted and stressed employees. According to a PWC survey, 1 in 5 employees said personal finances are a distraction at work, resulting in a loss of productivity.

As an employer, you should provide as much support as possible to ease your workers’ financial pressures.

Implementing a financial health strategy for your employees

The solution to this challenge is two-pronged; financial education coupled with products and services that encourage behaviour change and improve consumer financial health. Employers implementing financial wellness programs should provide employees with financial knowledge and access to financial products that help them get out of debt, spend, and save. One approach cannot exist without the other. 

Once a company has accepted the importance of financial wellness in their employees’ lives, employers should note their staff’s specific needs and understand that solutions are not one-size-fits-all. Below are ways to get your employees out of debt:

Provide employees with responsible financial help

South Africans face the highest inflation rate in 5 years, with inflation at 6.5%. The ramifications of this record-breaking high is an annual price increase in a wide variety of goods and services, such as: 

  • Fuel: +32.5% 
  • Electricity and other fuels: +14.4% 
  • Public transport: +12.5%
  • Meat: +9.4%
  • Bread and cereals: +8.4%

With rising living costs, consumers are dealing with the reality of trying to afford the same goods and services for higher prices. South Africans are being driven to rely on credit for day-to-day costs. The  African Reserve Bank reports suggest that about R750 out of R1000 is used to service debt by South African households. This shortage of funds pushes consumers to consider dire solutions such as getting a loan from an unlicensed moneylender, such as loan sharks. 

As an employer, it is your responsibility to assist your employees. It is essential to understand and respond to the financial problems they face. This does not imply that it is your responsibility to pay off their debts; instead, you should provide as much support as possible to ease your employees’ financial pressures. 

A solution to this challenge is to partner with a financial wellness provider, such as SmartAdvance. We offer your employees secure payroll deduction loans which significantly reduce employees’ monthly debt. This product aims for over-indebted employees to gain control over their debt and give all employees the relevant tools to manage their money better.

Below are the employee benefits of a payroll deduction loan:

  • They are protected: By law, an employer has to make sure that debt repayments do not exceed 25% of an employee’s gross pay.
  • They save: There are no bank charges involved in a payroll deduction.
  • Convenience: Employees don’t have to make special arrangements to repay their loans – the instalments are deducted automatically. With SmartAdvance sales staff on-site, it is also easy for you to do business with us and have your questions answered and problems resolved.
  • Cheaper credit: The agreement between SmartAdvance and an employer guarantees employees a lower interest rate on their loan.

Below are the employer benefits of a payroll deduction loan:

  • Productivity: Employees who are not worried about money are more productive and less likely to make mistakes and break safety rules.
  • Loyalty: Employees will feel that you care about them and, as a result, will be loyal and hard workers.
  • Reputation: Gaining a reputation as a responsible, caring employer.

There are alternative options to debt review.

Encouraging an over-indebted employee to go the way of debt review can seem like a good idea for getting debt under control. However, over-indebted employees need to be aware that, once they enter debt review, they cannot apply for new credit, which cannot be exited until all the debts are settled. 

No process exists in the National Credit Act (NCA) that enables voluntary withdrawal from the debt review process after the consumer has applied for debt review. Even if their circumstances changed and they could afford to resume the original repayments, their only option would be to accelerate their repayments to settle the debts sooner.

Instead, as an employer partnered with SmartAdvance, you can provide your employees with one of two alternatives. Firstly, for employees with multiple debts, SmartAdvance offers Rehabilitation loans. We offer R50 000 over 36 months to any permanent employee who needs to settle the external debt (Retail Loans, Credit Card Payments, Micro Loans and bank loans) to provide the means to improve credit records and improve monthly savings. 

Secondly, we offer value-added service for employees who are already under debt review, Debt Review Removal. During this process, we negotiate with your employee’s creditors to get the best settlement rates for them. We settle your employee’s debts, remove judgements and get them out of debt review. We restructure and consolidate their debt into one monthly payroll deduction repayment.

Your employees must be aware of all their options instead of debt review. By partnering with SmartAdvance, you help your employees regain their financial freedom and financial security.

Provide a financial literacy program

Once employees are out of the debt trap and have regained financial freedom, this is where they need the most assistance. It is within your means to ensure they do not fall into a debt trap. Partnering with a financial wellness provider like SmartAdvance gives your employees access to financial education courses that offer an easy-to-understand approach to help them get out of debt, build wealth, and change their financial futures.

SmartAdvance provides training on various financial topics to educate your employees and improve their financial stability. Our training helps create financially literate employees who manage their money with more confidence and have a better chance of handling the inevitable ups and downs of their financial lives and how to address any issues that may arise.

This helps employees navigate the pitfalls of debt by creating an understanding of it. This includes the benefits of repaying and avoiding debt. This enables employees to seek out the lowest interest rates when applying for loans and pay off monthly credit card balances to avoid interest charges. Financial education will also teach employees to protect themselves from debt and bankruptcy by creating an emergency fund to fall back on when unexpected expenses arise.

Modules are flexible and can vary from five hours to three days, depending on the level of detail required on the given theme. 

Financially literate employees are more likely to avoid making the same poor financial decisions.

Benefits of debt review removal for employees and employers

The benefits of debt review removal are not limited to employees; as an employer, you are also presented with company benefits.

For employeesFor employers
Stops collection calls at the workplace.Help reduce employee absenteeism.
Improved wellbeing due to less financial distress.Increased employee engagement/morale.
Improves money habits.Improves productivity as employees do not take time during working hours to deal with debt.
Improves cash flow to meet all household expenses.Alleviates demand for payday advances.

With strategies like these in place, employees will be better equipped to manage their finances and, therefore, focus on their work and increase their productivity.  They will undoubtedly feel that their employer cares about them and, as a result, will be loyal and hard workers.

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Help Employees Set Their Budgets and Help Your Business Grow

June 24, 2022

As an employer, one of your key roles is to help your employees develop their unique strengths and interests within their respective roles. An additional part of prioritising is to assist employees in setting personal financial goals and developing relevant plans to help you and your employees stay focused and on track.

Regularly assisting employees set goals builds their engagement with you as an employer and boosts their productivity.

To reap the rewards of assisting employees, here are some ways employers can help employees create a fully comprehensive budget for 2022 and improve their financial literacy.

Show employees how they can have an impact.

Very few of us can afford a large financial purchase with a once-off payment, nor can we operate in today’s economic climate without keeping our spending in check. For reasons like these, we need to help employees figure out how they can achieve their financial objectives. They can do this by creating a budget (a financial roadmap) to tell them where they started, where they are, and where they are going. 

SmartAdvance informs employees that the budget tells us if we can afford to buy wish list items or if we need that money to cover fixed expenses. It also helps us achieve financial freedom by saving for a financially healthy retirement and helps to prepare for potential emergencies.

Putting a personal budget in place helps create some sense of financial stability and can be implemented by following the below simple steps:

Step 1: Know where you are

It is essential that you write down the following; how much and how often does your money come in, and how often are you spending. The more comprehensive this list is, the more effective your budget will be. 

Step 2: Categories

Both income and expenses can be fixed or variable and regular or irregular. Separate your income and expenses into the respective categories. 

Step 3: Capture

Capture all your Budgeted income and expenses onto a spreadsheet/template. Remember to separate them into fixed, variable, regular and irregular income and expenses.

Step 4: Calculate budgeted amounts

Having the total amount of your income and expenses will enable you to calculate what you will have left or not be able to pay at the end of the budgeted period. This helps you understand what you can or cannot afford, where you can save money and what is happening to your money.

Step 5: Record and monitor actual amounts

Monitor your actual expenses for the period in question. You will need to separate your expenses into various categories at the end of the period to calculate how much you spent. This total is then captured under the actual column on your budget spreadsheet/template.

Step 6: Calculate variance (difference)

Calculate the difference between your budgeted amount and the actual amount for each income and expense category. This difference is called the “variance”. There are only three outcomes to this calculation. You have little to no variance, negative, or positive variance.

Step 7: Update and repeat

Repeat the process the next time.

Employers should refrain from creating goals for employees. They can dictate the objective but not the goal. It’s best if employees come up with the goals themselves.

Help employees reach their goals.

When you partner with SmartAdvance, you assist your employees in setting their budget, and we take them through the process step by step. 

For employees to successfully implement a budget, they must articulate what they hope to achieve with their budget so that we can assist them in setting SMART goals to make creating a successful budget possible. 

Employees need to understand that these goals are for themselves and not solely to improve their productivity at work. Employees need to know what’s in it for them, so we discuss the below with them:

  • How the goal impacts them personally.
  • How the goal aligns with their passions and career path.
  • The knowledge and skills they can develop while pursuing the goal.

Helping them helps you.

Succeeding as an organisation requires business skills, decision-making, and, most importantly, happy employees. Employees need to perform within the organisation and create value. In return, a company should assist them with essential matters such as budgeting and financial wellness. 

Budgeting is one of the essential skills to master. This requires a company to partner with a financial wellness provider that can provide training programs that equip employees with the financial literacy needed to address their changing financial needs. Implementing employee wellness programs that encompass benefits – such as financial training and financial assistance – is excellent for recruitment and employee retention and translates into crucial metrics such as improving productivity and profits.

Not only does it help you improve productivity, but more importantly, it has a positive impact on company morale which has become a central focal point for employers in this post-pandemic world. Employees who have access to financial wellness benefits are more likely to have high confidence than those who don’t. Employers who offer such solutions to their teams have employees who report less stress.

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The SmartAdvance Wellness Ecosystem makes better employees.

May 30, 2022

Financial wellness is a topic that increasingly pops up amongst employers. With most employees being stressed and worrying about their finances at work, it’s not hard to see why.

In this article, we’ll look at employee financial wellness, what a financial wellness program looks like, what the potential benefits are, and what you can expect when partnering with SmartAdvance.

Prevent employees from falling into a debt-trap

The focus of a financial wellness program is often on reducing debt, but another approach can be to help staff avoid debt altogether. Usually, debt reduction solutions lessen the financial burden, but the stress remains. This is where wage streaming is different since it helps staff avoid debt in the first place. 

Wage streaming allows employees to stream some of their earned wages. It is directly deposited into their bank account, assisting them when they need it most to avoid bills and expenses putting them into debt.

An additional focal point of financial wellness programs is financial education and training. Financially literate employees manage their money with more confidence and have a better chance of handling the inevitable ups and downs of their financial lives and how to address any issues that may arise.

This helps employees navigate the pitfalls of debt by creating an understanding of it. This includes the benefits of repaying and avoiding debt. This enables employees to seek out the lowest interest rates when applying for loans and pay off credit card balances each month to avoid interest charges. If they have already accrued such debt, they will be able to select the best methods to get out of debt. 

Financial education will also teach employees to protect themselves from debt and bankruptcy by creating an emergency fund to fall back on when unexpected expenses arise.

Enhance financial wellness within the formally employed

Partnering with financial wellness providers, such as SmartAdvance, allows your company to enhance the financial well-being of your employees by providing a selection of low-risk credit options and financial education/training. 

Due to the ongoing pandemic, there are tremendous challenges within the workplace that frequently affect employee productivity and morale, resulting in financial stress. Fortunately, employers now have the option to minimise the stress of employees. 

Suppose wage streaming does not cover the expenses that confront employees. In that case, SmartAdvance gives employees the option of using low-risk credit by giving them access to our array of financial products:

  • Rehabilitation loans – R50 000 over 36 months to provide the means to clear all debt, clear judgements and debt review and lead you to a path of financial freedom.
  • Education/Training – Provide training on various financial topics to educate customers and improve financial stability.
  • Personal loans – Customers can access safe and affordable finance for up to R30 000 over 30 months for essential expenses.
  • Developmental credit – Supporting local communities by building their dream home.

Providing secured payroll deduction loans which significantly reduce employees’ monthly debt

Payroll deduction loans are only available to employees of companies partnered with SmartAdvance. This product aims for over-indebted employees to gain control over their debt and give all employees the relevant tools to manage their money better.

Based on the terms of the agreement employees sign when taking out a loan with SmartAdvance, we submit all necessary information to your company’s HR department to deduct the instalment directly from an employee’s salary and have it paid to SmartAdvance.

Below are the employee benefits of a payroll deduction loan:

  • They are protected. By law, an employer has to make sure that debt repayments do not exceed 25% of an employee’s gross pay.
  • They save. There are no bank charges involved in a payroll deduction.
  • Convenience. Employees don’t have to make any special arrangements to repay their loans – the instalments are deducted automatically. With SmartAdvance sales staff on-site, it is also easy for you to do business with us and have your questions answered and problems resolved.
  • Cheaper credit. The agreement between SmartAdvance and an employer guarantees an employee a lower interest rate on their loan.

Below are the employer benefits of a payroll deduction loan:

  • Employees who are not worried about money are more productive and less likely to make mistakes and break safety rules.
  • Better employer-employee relationships.
  • Gaining a reputation as a responsible, caring employer.

Create happier, healthier, and more productive employees

Let’s look at the employee benefits of implementing a financial wellness program throughout your company:

Reduce mental stress

Financial stress results in absenteeism and tardiness amongst employees. Providing employees with the necessary financial products and education can help alleviate this burden. Furthermore, these programs reduce employee stress levels and increase their overall health by providing them with the tools they need to take control of their finances.

Increase in employee satisfaction

Employees who have access to financial wellness programs have reported greater professional satisfaction. Programs let them set and achieve personal financial goals, including building an emergency fund, upgrading their homes, and much more.

An employee prepared for unexpected financial emergencies can engage more at work. This is because they do not have to worry about their long-term finances.

Increase in leave days

Employees who worry about money miss two more days per year than their unstressed colleagues. 

Financial wellness programs offer many free resources to help employees during the workday. Whether it’s financial education classes, career coaching, or benefit programs, financial wellness programs help employees reduce finance-related health symptoms. Instead of sitting in a doctor’s office for long periods, less stressed employees can use their leave days for relaxation and rejuvenation.

It is not only employees that gain benefits from financial wellness programs. Employers do as well, and below are some of the benefits that you as an employer can expect:

Increased productivity

Employees whose financial pressure increased due to the pandemic are more likely to admit that their finances are a distraction at work.

Luckily, financial wellness programs can provide employees with alternatives to stressing over their finances. Financial education courses, benefit funds, and financial aid products can alleviate employees’ money worries. Thereby, productivity increases and your organisation will be able to thrive as you reduce these types of stresses.

Reduce absenteeism

Financial stress results in a 34% increase in absenteeism and tardiness, according to research from Society for Human Resource Management.

Money-related stress can also lead to increased presenteeism; employees come to work despite being physically or mentally unwell. While it may seem less harmful, presenteeism seriously affects organisations and can cost them a lot of money. Companies save on labour expenses when employees aren’t missing work due to their financial stress. 

If you are one of the growing numbers of employers launching financial wellness programs for employees to enhance the bottom line of your company and improve the lives of your employees, get into contact with SmartAdvance to find out how we can get you started.

Email us: [email protected]

Phone us: +27 12 045 0606

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We need to talk about Christmas.

December 7, 2021

For most Christmas is, unfortunately, the most expensive time of the year. A recent study conducted by Wonga SA has revealed that South Africans spend an average of R5 706 EACH over the festive season. The chances of us overspending this festive season are even higher after the tough year we faced thanks to the pandemic. This might be the only chance some of us get to see our family this year, so the urge to spoil them is stronger than usual.

This is why, more than ever, it’s important that we talk to our family and loved ones about the cost of Christmas.

Talk to your loved ones

We want to spoil our loved ones during Christmas, this is a tradition that most of us fall prey to. The problem is the extent we go to.

Work out how much you can spend on each of your loved ones, a budget that won’t lead you into financial trouble, and talk to the people you plan on giving gifts to about how much you will be able to spend.

We know that many of us is probably too embarrassed to chat about this. It’s important to remember that many of us are struggling this December and if you splurge on gifts others might feel the pressure to do the same for you.

Remember that Christmas is not about what you can buy, it’s more important that you are able to spend valuable time with loved ones.

Make a budget and stick to it

With the possibility of a harsher lockdown during Christmas, we aren’t sure whether we’ll be able to spend the season with anyone other than our immediate household and this makes budgeting difficult.

Even though planning might be trickier, it remains important that we at least try to create a Christmas budget. To begin, make a list of family members and friends that you will be buying a gift for and how much you will spend on each of them.

If you are hosting a dinner, plan how many people will be coming over and how much you will be spending on food and drink. Consider asking everyone who comes over to contribute to the dinner, whether it’s drinks or a salad, each bit helps.

Most importantly once you have your budget stick to it!

Look for cheaper alternatives

Don’t be afraid to hunt on bidorbuy or at Cash Crusaders for good-as-new second-hand gifts. If you’re good with your hands, a handmade gift is thoughtful and doesn’t need to be expensive. Or maybe you’re a pro at baking and have the skills, bake amazing treats for family and friends.

Cheap or even free does not mean that thought didn’t go into it.

Final thoughts

Sometimes, no matter how careful you are and no matter how hard you try to plan the festive season might throw unexpected expenses your way. If you need help to get through the festive season, reach out to SmartAdvance so that we can help you take care of the necessities.

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5 Ways to Avoid Overspending on Black Friday

November 25, 2021

Want to curb that Black Friday empty bank account blues? We know that holiday shopping can be stressful. The season brings financial pressures, which includes saving enough for all the gifts you want to buy and struggling to stick to your budget. 

We are not alone in this, in fact 76% of South Africans overspend over the festive season with the average South African expecting to spend over R6 500 on Christmas alone. The financial strain we are left under after the festive season is anything but jolly.

But there are some easy strategies you can employ during those tempting Black Friday sales to limit your overspending.

Set Spending Limits

Secret Santa or gift exchanges are known to impose limits on how much we’re allowed to spend per person. But we can do the same with friends and family.

We shouldn’t be afraid to set limits and make them known. Be open with talking with friends and family and come up with an amount that suits everybody’s budget. Or set your own budgets and let your people know in advance what you’re planning to do this holiday.

Know Your Spending Triggers

There are many reasons we overspend, but we can control our spending by identifying what causes us to shop on impulse and buy needless things. For example, many of us can’t resist a sale. But just because something is on sale doesn’t necessarily mean that we are saving money.

For example, be careful of “buy more, save more”. The tactic is to make us think that there is better value when there is R100, R200 or R500 off, but it is the same discount percent so don’t let that claim make you spend more.

Have a Game Plan

It’s important that we take the time to do our homework before we head to the shops, online or physical, this black Friday. Retailers generally release their ads in advance, so be sure to compare the advertised prices and promotions.

But we know that sometimes you just want to know whether something is a good deal or not. SO have a look at this Black Friday calculator. You plug in the type of promotion, the original price and the discount and the calculator will tell you if the deal is worth considering.

After you have calculated the worthiness of those Black Friday deals, create a list of gifts you want to buy from each retailer, which saves you time and money. Be sure to have back-up gifts planned, so if the chosen gift is out of stock, you don’t waste time scrambling at the last minute and overspending. 

Track Your Spending 

It can be very easy for us to get caught up in the ongoing sales of Black Friday, that is what makes it so important to monitor your spending. Watch all of your purchases and don’t get caught up in the thrill of all the deals.

You can do this by checking your credit card and debit card transactions or using an app like 22seven, which links to all your bank accounts and send you purchase and budget alerts.

Keep track of all the Christmas gifts/Black Friday purchases you’ve made on a list and stick it on your fridge, seeing the numbers help you make better buying decisions because it holds us accountable.

Final thoughts

With the holiday season coming up, we know that it might not be possible to get through it without some help. If you are looking for responsible loan options, apply for a SmartAdvance loan today

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How SmartAdvance Boosts Employee Financial Wellness

October 25, 2021

Covid-19 has impacted the way that many employers approach employee wellbeing. Businesses have started to reconsider the importance they place on the financial wellbeing of their employees after the significant financial strain they have been placed under for the past year and a half. Financial wellbeing programs are no longer an added benefit but a necessity for an engaged and productive workforce. 

To put this is context, 89% of employees in South Africa are concerned about their ability to pay their bills. Additionally, 80% of employees are unable to make it to the end of the month. The level of stress these places employees under is monumental and minimizes their ability to prioritise anything other than survival. Ultimately this results in 20% of employee absenteeism being a result of financial stress. Figures like these severely decrease company revenue because of the decline in overall productivity. 

Not having a financial wellness program means as an employer you are spending a significant portion of your workday on time consuming admin. Worse, it means employees do not have access to financial protection and insurance which prevents them from becoming over-indebted and going to unreliable credit providers. Ultimately what this leads to is a workforce that is snowed under by financial stress which adversely affects their productivity. 

Partnering with a financial wellness provider such as SmartAdvance helps you oversee the entire employee wellness journey which includes everything from payroll services to developmental credit.

SmartAdvance provides a holistic employee wellness solution:

Payroll services

Finclusion has recently announced the acquisition of a strategic stake in HelloHR, a South African payroll software startup. What this means for SmartAdvance clients is that they now have access to a holistic financial wellness product. This acquisition grants SmartAdvance clients access to payroll services which includes the automation of the necessary leave and tax adjustments. Meaning that clients save time and reduce the chance of human error.

Wage streaming

This allows employees to access to a small portion of their earned wages at an earlier date. This gives employees a responsible alternative to taking out a loan from a unreliable lender by giving them the more the option of access to their own wages at an affordable flat rate.

Rehabilitation loans

Give employees the opportunity to improve their credit rating by giving them access to rehabilitation loans. They have the option of getting a loan of up to R50 000 over 36 months so that they can improve credit rating and improve monthly savings.

Developmental credit

Your employees have access to developmental credit which helps them build, expand or improve low-cost housing, thereby helping them improve the community in which they find themselves. 

Behind the Scenes

Making all of this possible is the amazing SmartAdvance team that is supported by the Country Head, Gerrie Fourie.

Gerrie spent almost 10 years starting and managing various finance companies throughout Africa. He started his journey with the Finclusion Group in June 2020, ultimately taking on the role of SmartAdvance Country Head in April 2020.

He was brought in to oversee the successful implementation and managing of all SmartAdvance operations. 

Currently he is tasked with aligning the SmartAdvance strategy with that of the Finclusion Group. This strategy alignment is vital as they have recently received funding and now the responsibility is on him to deploy it and guarantee it is dispersed to the necessary departments.

“Business development is a top priority, because we cannot afford to not move forward. Just because we are successful today does not guarantee it tomorrow.”

Forward momentum is also driven by strategic partnerships, which Gerrie helps forge and nurture. 

“If you want to increase your expertise and resources, create predictable revenue streams and provide incremental lift to sales and revenue, all while keeping acquisition costs down then your ability to solidify strategic partnerships is priceless.”

Day-to-day he is responsible for SmartAdvance’s staff management and reporting. Staff management is a lot easier as face-to-face communication is possible once again as more employees are returning to the office as lockdown regulations are eased.

He is trying to ease the transition back to the office by aligning company culture with the long-term goals of employees and SmartAdvance. He has also busy with tech enhancements which will greatly benefit the success of his employees.

If you are ready to looking after the wellbeing of your employees, get in touch with us to discuss partnering with SmartAdvance.

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Setting an Education Fund for Your Child

October 1, 2021

With the rising costs of education, investing for your children’s education is no longer a luxury but rather a necessity.

A 2016 report from City Press calculated that education for your child starting from Grade R to matriculation at an average fee-paying school would cost you approximately R253 000, and former Model-C schools costing around R676 000.

Fortunately, there are various saving options for parents which are listed below:

Fundisa

If you can only afford small amounts but still want to save for education, this investment tool is a good option.

This is an education savings plan by the government, the National Student Financial Aid Scheme and the Association for Savings and Investment South Africa. This type of savings plan has the benefit of a top-up bonus annually as a reward. This can be as much as 25% of the amount saved per year.

The minimum contribution is R40 per month, and there is no maximum. However, Fundisa is designed for lower-income earners. Only families that earn less than R180 000 per year qualify.

Tax-free Savings Account

A tax-free savings account can be opened up in the name of your child. There is an annual limit of R30 000 and a lifetime limit of R500 000.

You will accumulate R500 000 by the time they are 16 if you start contributing from when they are born. With the power of compound interest, a relatively modest start-up investment should be more than enough to cover the cost of your child’s education.

Policies

If you are scared that you might be tempted to use some of the money that you are saving for your child’s education, consider taking out a policy

Most education plans that are on offer are generally endowment policies. This means that a monthly payment is made for a specified period and a lump sum is paid out at the end of the period. It is important to note that the minimum investment term is generally 5 years. 

There are education saving endowment policies from various South African finance institutions, eg. Momentum. Monthly contributions can start as low as R150. Be sure to select a package that will cover your monthly contributions in the event of permanent disability or death. It could also be beneficial to select a plan that is able to give you a payment holiday if you are under financial strain for a couple of months. 

Unit Trusts

Most experts view unit trusts as the best way to save towards a child’s tuition fees. The long term returns on unit trusts are consistently higher than returns on cash savings and usually also better than those on educational policies.

A unit trust has a better chance of outperforming South African inflation rates than typical bank savings account. Also, a significant amount of your interest from your unit trust is exempt from tax.

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How to Stay on Top of Your Finances

October 1, 2021

Studies show that some people are more concerned about money than their own physical health. For most us this worry stems from a fear over losing our jobs, not having a savings account that you can fall back on and not having money for retirement.

But there are ways that we can get on top of our financial worries – here are some helpful tips:

Understand your spending habits

Knowing when you are spending and on what is an important part of preparing for stressful financial situations. You don’t need fancy apps to do this, your own mobile banking app can give you this information.

Analyse which payments are being processed, perhaps there are subscriptions that you can cancel. If not, assess all purchases that you have made, you’ll be surprised by how many you’ve forgotten about.

Next, decide where you can improve next month by reducing unnecessary purchases. Lastly, set aside disposable income that you are allowed to use to buy the items you want but don’t need (and don’t go beyond that budget!).

Protect your family

Worrying about what could happen to your family if something happened to you and your earning capability, is a horrible feeling. It’s important to know that your family is protected financially should something like this happen.

Insurance policies that payout in situations like these to provide protection and some comfort to you.

Make a ‘money worries appointment’

Worrying about money is difficult work, so set aside a time that you can go over all financial documentation and create realistic steps towards your money goals.

Make a plan for what you want to cover during this ‘appointment’. Once you’ve done it, stop thinking about money as much as possible until your next ‘appointment’ rather than letting it spoil your days.

Create an emergency fund

We know we’ve spoken about this specific tip many times before and this certainly won’t be the last time, this is because of how important it is.

You can never know when unexpected expenses are going to arise and these expenses could potentially derail your finances completely. To stop bad luck derailing your budget, try to put together a fund for emergencies. Try to put aside enough cash for 6 months of expenditure. 

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Financial Wellness Programs

October 1, 2021

Being aware of the signals when an employee is in financial distress and knowing what the different elements of financial well-being are, is not enough to support your employees.

There are measures that you can put in place to achieve this, namely, creating an employee financial wellness program. This is a program to help employees better manage their finances and reduce financial worries. In any financial wellness program offered to your employees (of all income levels) there are 5 key areas to focus on:

Budgeting and Spending 

Stress the importance to your employees of tracking, spending and planning what you will spend via a budget. It is important for them to remember that their projected and actual spending may not match exactly, but they should have a goal and monitor where their money is going.

Emergency Funds

You can help your employees understand that besides ordinary expenses, there are always emergencies that pop up here and there, some major some small. They should be disciplined in saving for such unexpected events. Recommend to your employees that they should save the equivalent of three to six months of your typical salary.

Financial Counselling

When it comes to buying a car, house, or any major purchase (especially one that requires going into debt), it is wise for your employees to get expert advice. They should preferably get 2 or 3 experienced opinions before making a final decision.

Investment Strategies 

Further, explain to your employees if they already have their day-to-day finances under control and have a sufficient amount of money saved, they can do well by investing any surplus funds. You can offer recommendations on how to invest for instance, it’s best to choose stable, low-risk investments rather than risk a big chunk of your “life savings”. They should look for investments that are almost sure to pay a respectable dividend, even that means waiting longer to receive it.

Improving the financial well-being of your employees’ matters not only because it will decrease employee absenteeism, presenteeism and increase their productivity but also improve the overall quality of life for your employees.

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