Despite recent improvements in the economy, the hangover effect from the recession and slow economic growth continues to erode employee’s retirement confidence and overall financial wellness.
Most businesses have made very little or no provision for their employees severance or gratuity benefits. It is against this backdrop that Businesses in Botswana have been called upon to play a role in securing their employees financial wellbeing.
“All the business strategy should comprise of a proper financial plan for securing the financial wellbeing of their employees,” said Dorcus Makgatho-Malesu, the Minister of Trade and Industry.
In the past employment regulation required that employers pay their employees a compounded severance or gratuity benefit after 5 years of service. However, Government has introduced new measures whereby employees have to be paid pro-rated severance gratuity benefits regardless of the completion of their employment contract.
Financial stress of employees is very toxic on the productivity and morale of a company reiterated Malesu, adding that employees should offer proportionate products that can motivate employees towards achieving the desired levels of productivity.
“Securing employee’s financial wellbeing has not been practiced and employees are being paid from either cash at hand or company’s working capital,” she said.
Malesu emphasized that employers undoubtedly have an active role to play in the financial wellbeing of employees.
“Employers should abide by the prevailing governing regulations and make provisions for the liability,” she said.
In some instances where an employee has made an attempt to make provision for employees severance benefits they are usually in call account at commercial bank where such benefits accrue little or no interest.
“Companies should wake up and take the welfare of their employees seriously,” she said.
Businesses have been encouraged to benchmark from existing government employee’s pension schemes to have better solutions in securing employees future.
“All businesses should come up with reasonable attractive employee’s severance benefits and retirement packages in order to attract and retain the right talents and reduce employee mobility,” said Malesu.