To create financial wellbeing for individuals and their families, it must be contextualised in an environment where a primary focus is placed on creating both a 'wellbeing economy' and a 'wellbeing corporation', Alexander Forbes says.
Its ‘Benefits Barometer 2018’ report, which was released on Thursday, aims to provide a framework to achieve this by creating multistakeholder collaborations that prioritise developing solutions that offer the best multiplier impact on societal development and economic growth.
The Benefits Barometer is an Alexander Forbes Research Institute thought leadership publication, focusing on the financial services industry.
Alexander Forbes Research Institute head Anne Cabot Alletzhauser told the media on Thursday that statistics showed that the current system of financial solutions did not work in the way intended, with many people not seeing retirement as their priority.
The Benefits Barometer, therefore, aims to offer new insights for the continent. It analyses how effectively the current model of employee benefits is addressing members’ needs, who it actually benefits, and what is required to engender better outcomes.
The publication indicates that the current system is too fragmented to deliver on the promise of physical, mental and financial wellbeing. Moreover, the Fourth Industrial Revolution has had a considerable impact on the space.
Alexander Forbes stresses that the employee needs to be at the centre of benefits.
Alletzhauser indicated that, while there was a proliferation of articles focusing on Africa, these did not take the correct strategy and often missed the crucial role employers could play.
She emphasised that future value for the continent would require a genuine collaborative effort between business, government, communities and citizens.
However, in pursuing this, there were a number of factors and challenges to contend with, she cautioned.
This includes the lens of responsibility, where employees are not solely responsible for their family. Rather, in a developing economy, the assumption is that employees have a number of financial dependents.
Another facet is that there is no such thing as ‘average’ or ‘medium’ in Africa, with African nations ranking the highest on the diversity index. This typically means that conventional models do not apply effectively, as has been evidenced historically.
Demographics also pose a challenge, specifically in sub-Saharan Africa, where the majority of citizens are in the working age population and will be moving into the workplace.
Therefore, Alletzhauser indicated that employees had focus on this need, and not merely on catering for retirement.
For financial services providers to make employee benefits and compulsory savings more meaningful to members, there was an option to convert compulsory savings into a guided financial planning tool for employers, with this focused on the lifecycle of employment rather than just the end result of retirement.
Alletzhauser indicated that unemployment was a major challenge for policymakers, but creating jobs did not necessarily negate the risk of poverty.
This is evidenced by over one-third of Africans who are still below the poverty line.
Therefore, this creates a good starting point for employers to identify ways for their employees to effectively redeploy their income for sound financial stability.
This is, therefore, an area where company-sponsored financial wellbeing programmes can make a considerable impact.