Debt is no stranger to South Africans. Statistics from the National Credit Regulator (NCR) show that in South Africa, about 25 million people have active credit records and of those, 10 million are in arrears. South African is one of the most over-indebted nations in the world.
This grim picture raises an important question for managers and business owners. What does this mean for my staff? It is very likely that many of them are struggling with their finances in one way or another. Some may have trouble budgeting, others may have taken out debt for an unforeseen event, but whatever the case may be, they may need some help.
How Does Debt Affect Staff?
Debt can affect people in different ways. For some, debt is a good thing and has allowed them to make good decisions such as investments in assets or education. For others, debt has been used to supplement income for basic living expenses. Debt has been the lifeline which is now crippling them. Once the debt starts piling up, it quickly turns into a slippery slope that can get out of control.
We are going to focus on the impacts that too much personal debt can have on your employees or fellow staff members.
Phone Calls, Emails And Messages
Credit providers and debt collectors are known to aggressively chase up on overdue debt repayments. Phone call after phone call and email after email start coming in at a rapid rate. Many consumers get familiar with certain credit providers numbers and never answer any private calls. This constant stream of contact can be very distracting in an office environment. The calls are also reminders of the debt problems which they may have at home.
The constant telephone calls, messages and emails may cause employees to stay at home and have regular “sick” days. Employees stay at home to avoid credit providers or go into the banks to make arrangements with them. This often ends results in abuse of the work place systems and the employees contract.
Lack Of Sleep
Constantly worrying about money can cause employees to lie awake at night. Late nights with no sleep will cause fatigue and unproductiveness. There is often little time during the day to think about your debts and your financial circumstances so these thoughts easily creep into your mind when you are trying to unwind or get to sleep at night.
Due to increased stressed levels, over-indebted consumers are likely to try and find some sort of release. This often results in picking up smoking, alcohol or even drug abuse. These are used to try and take the debt off their minds and are both unhealthy and dangerous. The after effects of these habits can affect work performance and concentration. They could even cause aggression and other dangerous behavior, if they are still in the system whilst at work.
Whether working in an office or as a labourer in a manual job, accidents can put the business and even other employees at risk. Employees that deal with sensitive information or have to make big company decisions might make errors due to stress or distraction as a result of their debts. Manual labourers that handle heavy equipment or tools may cause an accident which could result in serious injury.
No Teamwork And Low Morale
An employee with debt problems may not be as eager to work in a team or interact with others due to their financial situation. This can have a bad effect on all the other team members and the business could suffer as a result.
What Can Be Done About It?
The best possible solution is for an employer to pay off all of their employees’ debts, but unfortunately there is a very small chance of this happening. There are, however, other ways in which employers and colleagues can help and get involved.
This seems like a simple solution, but it is one of the best things that an employer can do. Instead of singling out employees that you think may be experiencing financial difficulty, rather give your entire workforce, or even specific departments support. These can be in workshop or presentation format. Encourage your staff and colleagues to actively participate and interact in order to get a real learning experience. Send out informative infographics to staff members or put educational posters up around the office.
Try and establish a wellbeing program that focuses on personal finances and health. This can be of great value to your staff. Make sure that your HR team is equipped to deal with debt queries and personal financial issues. Ensure your staff that there is a certain level of professionalism and confidentiality in the processes that have been set out to help staff members.
Your staff needs to feel valued, both in and out of the office. By caring for them as a person, they are likely to bring a positive attitude and put in extra effort at work. Large corporates are often guilty of being too big to care about each staff member, however this can be overcome by having consultants and HR members that specialize in helping staff members with issues such as debt.
Think of it as an investment in your staff which is likely to increase their productivity and commitment to your business. In circumstances where programs and HR is unable to assist, referring them to professionals may be the best option. Employees and colleagues that are struggling with their debts should speak to a registered debt counsellor. A debt counsellor can assist them be offering them valuable advice and debt consolidation solutions. Consolidation loans can assist by paying off all smaller debts and being left with one larger loan. Debt counselling can assist by lowering the debt repayments and interest rates of current debts.