Here is how SMEs can prioritise their employees
Many businesses often forget to prioritise their employees, overlooking the fact that they are the ones who put in the work and make ideas become a reality. If employees are not happy, it often shows in the business's performance.
FNB is warning small and medium enterprises (SMEs) that not prioritising employee productivity could significantly hinder the success and growth of their business.
'The key to driving productivity is a clear, people-first strategy built on the four pillars of incentives, benefits, culture and education', says Palesa Mabasa, Business Development Head: SME Funding at FNB Business.
She highlights that productivity is not about pushing people harder, but creating an environment where people want to show up, contribute and grow.
Incentives for employees
Mabasa highlights that incentives are one of the most effective levers for boosting performance.
It does not have to be anything complicated; it can be a commission, performance bonuses, or creative perks like weekend getaways or vouchers for top performers.
However, it remains important that these incentives are fair, transparent and directly tied to results.
'Even the best incentive programmes can backfire if they are seen as opaque or biased. That is why clear Key Performance Indicator (KPIs) and regular performance feedback are vital.'
ALSO READ: Work and lifestyle goes hand in hand: Game-changing benefits to attract top talent in 2025
Employee benefits
Mabasa notes that employee benefits play a crucial role in enhancing productivity and employee retention.
'While many SMEs assume benefits are too costly or complicated, she urges business owners to think differently.
'Simple offerings like funeral cover, pension contributions or medical savings options can go a long way towards making employees feel secure and valued.'
Company culture
Another factor that boosts employees' productivity is an open and inclusive culture, rooted in shared purpose and values.
'If your team understands where the business is going, and they believe in that vision, they will offer your business that highly prized discretionary effort, that only comes from truly engaged employees.
'Strategy must be explained in a way that everyone understands their role in delivering on it.'
She highlights that culture is not just about feel-good values on a poster; it's about daily behaviours that everyone buys into and, very importantly, the behaviours that are not acceptable.
ALSO READ: How to create a healthy work environment for employees
Importance of education
Mabasa says the final piece of the productivity puzzle is employee education, particularly in areas such as financial literacy and tax matters.
'Many employees do not understand how a bonus affects their tax, or why certain deductions appear on their payslips. Without that understanding, even generous benefits can cause confusion or frustration.'
She recommends SMEs to focus on delivering financial education to staff, as this will reduce misunderstandings around payslips and benefits.
Employee education can also foster a more financially responsible and resilient workforce, one that is not only financially confident but also driven to perform.
'With the right approach, even the smallest business can attract, build and retain a team that performs like a powerhouse.'
NOW READ: Remote work vs return to office: The battle for workplace culture, pay and productivity
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IOL News
12 hours ago
- IOL News
First-Time Buyer in SA? Why a 10% deposit can save you over R160K
It pays to conduct a detailed analysis of your spending habits as a starting point. Image: RON AI Simon* was no stranger to second-guessing himself, and at times, he really wondered if he was making progress in life. As a junior account manager at a marketing agency, he was making a reasonably good salary for a 28-year-old. Not thriving, not rolling in it, but theoretically skirting within the boundaries of middle-class life. But often it just didn't feel like it. He lived in shared accommodation with two other people. When his girlfriend slept over on weekends, she complained about having to share a bathroom with other housemates. She also wasn't a fan of his silver 12-year-old Toyota Yaris with a massive gash across the back bumper. Many of his friends rented their own townhouses, often impeccably furnished, and with the obligatory big screen TV for Saturday's rugby game. One of his friends, at a similar earning level, bought himself a brand new Polo GTI, right out the box. But when Simon looked at his investment account balance, a gentle smile lit up his face. Living below his means, and strictly managing his cash flow, was allowing him to save between 30% and 40% of his net income, depending on each month's unexpected expenses. He'd been saving at a significant level since the age of 26, and not too long after his 30th birthday, Simon bought his first house. He did this with a 30% deposit, drastically reducing his interest rate and setting himself up to be debt-free sooner than expected. He also traded up to a partner who didn't judge his trusty old ride. There are numerous examples of South Africans who made the necessary sacrifices to save up for their home loan deposit. Although many first-time home owners opt for a zero deposit option, this will lead to significantly higher interest rate payments over the long term. Let's look at a simple example. If you buy a R1 million home with a 100% deposit, at 11.75% interest over 20 years, your monthly instalment will be R10,837, and the total interest paid over the term will amount to R1,6 million, according to FNB. But put down a 10% deposit of R100,000 and you're looking at a lower monthly payment of R9,753, and the total interest amount is reduced to R1.44 million. That's a saving of around R160,000 in interest over the 20-year period, and you stand to save far more than that by putting down a 20% or 30% deposit. 'Putting down a deposit signals that you're financially ready. It reduces the loan amount you need, lowers your monthly repayments, and increases your chance of approval. It also shows that you've built the habits needed to manage your long-term financial commitments,' says Sfiso Mahlangu, structured lending product manager at FNB Home. But how do you save for that all-important deposit? Farzana Botha, senior communications manager at Sanlam Risk and Savings, said she and her husband made several sacrifices while saving for their first home deposit. These included downsizing their car to reduce repayments and selling household items that were no longer needed, while her husband also took on side jobs to generate additional income. 'These sacrifices were tough but worthwhile – having a deposit gave us access to better finance options and made our dream of homeownership possible,' Botha enthused. She says living below your means is one of the smartest ways to reach your dream of owning a home faster. 'It starts with being intentional about how you spend and save. Work out how much you'll need for a deposit and set a monthly savings target. Automate that amount as soon as you're paid so it becomes a priority rather than an afterthought.' She recommends tracking every cent of your income and expenses, and making lifestyle tweaks where possible. This could mean cutting back on things like entertainment, takeaways and subscriptions. Even small changes like cooking at home and sharing streaming services can free up hundreds each month, she adds. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ It's well worth saving up for a bigger deposit if you can. Image: RON AI Luke Davis-Ferguson, financial planner at Fiscal Private Client Services, advises South Africans to resist the urge to upgrade their lifestyle after receiving a raise or bonus. 'Consider moving in with family, getting a roommate or relocating to a more affordable area temporarily. Selling unused items can also give your savings a quick boost.' His firm recently helped a couple create a monthly surplus of nearly R5,000, simply by reducing discretionary spending on eating out, subscriptions, and impulse purchases. Be aggressive with your savings strategy Luke Davis-Ferguson says the first step is understanding exactly where your money is going. He recommends downloading bank statements from the past three to six months and reviewing every line item. Tools such as Discovery Bank's Vitality Money Financial Analyser or FNB's Money Savings Goals can be used to create a detailed and customised monthly budget. Davis-Ferguson says the 50/30/20 rule is generally used as a starting point for budgeting. This means 50% for needs such as rent, groceries, transport and medical aid, 30% for wants like entertainment and eating out and 20% for savings and debt repayment. However, if your goal is to save for a deposit, this ratio needs adjusting. Consider trimming wants to 10% and boosting savings to 40%. Ester Ochse, product head at FNB Integrated Advice, recommends a 'pay yourself first' approach to savings, in which you automate your banking and move a set percentage of your income into a separate savings account. Ester Ochse, product head at FNB Integrated Advice. Image: Supplied 'This removes the guesswork and the temptation to use what's meant for your future on short-term wants,' Ochse said. She recommends the 80:20 rule, with at least 20% of one's income being directed to savings, or more if possible. Furthermore, it's vital that you set a clear savings goal with a clear timeline, says Tando Ngibe, senior manager at Budget Insurance. 'Break it down monthly so it feels achievable. Then automate your savings through your bank so it becomes a habit, not a decision. 'Remember, living below your means isn't about depriving yourself. It's about being intentional with your money so you can build the future you want,' Ngibe added. Tackle your debt first Before ramping up your savings, it's crucial to tackle any high-interest debt, especially from credit cards, clothing accounts or personal loans, Davis-Ferguson says. 'These debts often carry interest rates that far exceed what you could earn in a savings account, meaning they erode your financial progress,' he adds. 'Start by listing all your debts, including balances, minimum payments, and interest rates. Focus on paying off the highest-interest debts first (the avalanche method), or if you need quick wins to stay motivated, start with the smallest balances (the snowball method). 'Once you have cleared your high-interest debt, redirect those monthly repayments into your savings,' Davis-Ferguson concludes. It's important to estimate what your monthly costs will be after purchasing your first home, Discovery Bank's head of technical marketing, David Leibowitz advises. This means adding up the estimates of your monthly home loan, as well as municipal rates, utilities, levies (if you're in a complex), home insurance and future property repairs and maintenance. Bond registration and property transfer costs also need to be budgeted for in advance. Why you should put extra money into your bond If you've budgeted correctly and there is still a bit of money left over at the end of each month, it makes a great deal of sense to put this into your bond. Simon, who we mentioned earlier, is already looking forward to paying off his bond sooner and saving a great deal on interest by employing this trick. But how much can realistically be saved? According to FNB, paying an additional R500 into your 20-year bond on a R1 million property, using the aforementioned example, will save you R335,000 in interest and shorten your loan period by three years. Whichever strategy you follow, it is important to approach your savings with a goals-based approach, says Nicola Langridge, wealth manager at Private Client Holdings. 'Starting a new exercise regime has always been hard for me when I am not clear on what the goal is. I am far more committed when I have entered a 21km race or booked a hiking trip that requires preparation and has a clear deadline. Saving for your financial future follows the same principle,' Langridge says. But life does not happen in a straight line, so regular reviews and adjustments are essential as circumstances evolve, she adds. IOL
IOL News
16 hours ago
- IOL News
Stokvels hold billions, but are they missing the bigger financial opportunity?
South African stokvel savers are showing resilience and determination as they continue to stash away billions in savings despite the tough economic climate. Image: File Stokvels are traditional community-based savings clubs that have largely been utilised, particularly among lower-income communities, pooling resources towards common or different goals. Last year, IOL reported that South African stokvel savers are showing their resilience and determination as they continue to stash away billions of rand in savings despite the tough economic climate. At the time, FNB revealed that, since November 2019, its customers' stokvel deposits had increased by 42 percent, surpassing the R8,3 billion mark in total member contributions. Across the country, savings through stokvels are estimated to be valued at almost R50 billion a year. On the other hand, Standard Bank, citing data from the National Stokvel Association of South Africa (Nasasa), said there are over 810,000 active stokvels in South Africa, which collect an estimated R50 billion in savings annually from more than 11 million members. Speaking to IOL, chairperson of Sakhisizwe Property Stokvel, Silindile Leseyane, said stokvels have been around for many years, primarily focusing on short-term savings and death benefits for their members. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Chairperson of Sakhisizwe Property Stokvel, Silindile Leseyane, spoke to IOL Image: Supplied 'As the stokvel industry is estimated at R52 billion, the missed opportunities are meaningful investments and opportunities to participate in the economy in a meaningful way,' she said. 'The challenge is most stokvels have a short-term focus and don't have the long-term view that is required to create real impact. They are also mostly informal, and therefore this also has an impact on the longevity of the stokvel.' She suggested stokvels would do better by being formalised, and taking fractions of their savings, ploughing them into meaningful investments. 'This would have a great economic impact for them, their families, and their communities,' she said. On the other hand, a seasoned entrepreneur, author, and stokvel expert, Busi Skenjana, told IOL that the stokvel ecosystem is fraught with challenges and misconceptions, but if done professionally, the venture can be rewarding - and she has the lived experience. Skenjana has penned a book titled: 'Stokvel Voices: The Truth, the Illusions, and the Opportunities'. 'I would say around stokvels, there is a lot of movement, the ground is actually swelling into the future,' she said. 'Being a member of a stokvel myself, I think people could do better. In the book, I have covered about five stokvels, some of which I belong to. I have actually rated the stokvels - there are about two or three which I give a high rating, according to my assessment. There is still a lot that they could do better.' Skenjana told IOL that there is a need for financial education for members of stokvels and a departure from the mindset of consumerism, where all the savings are destined to be devoured at a given time, or when a target figure is reached. 'You find that many stokvels are consumer oriented, as opposed to long-term investments. For me, that is something that is glaringly not right. The emphasis is on consumerism, as opposed to how we can, together, build wealth as a community, and to address the economic imbalances,' she said. 'We all know the origins of stokvels, which was to try and minimise the economic blow that people suffered through the apartheid era. I still find that there is more of the social and quick disposable money - we save R50,000 which we later distribute among members, blow it then we start all over again. That is wrong and an area of concern.' In her lived experience, Skenjana said she has been part of formalised stokvels, which have managed to make meaningful investments into property and other significant undertakings. She insisted that there are opportunities for young people to come together and make considerable investments as groups, which will help them in their twilight years. 'I have become a gogo and still a member of a stokvel. Gogo does not join a stokvel in her advanced years. No, one joins from their 20s and grows like that. People look at the aged people in stokvels and forget that these people became members of the stokvel when they were young. Some people have been in stokvels for more than 50 years, literally. 'I was speaking to a woman who told me that in their stokvel, they were celebrating the 50th anniversary. Personally, I think I was around 25 years old when I joined the stokvel, and I am 68 years old. I am still a member of two stokvels.' Author Busi Skenjana's life experiences have significantly shaped her understanding and advocacy for stokvels. Image: Supplied Skenjana said she is a proud member of stokvel formed around 1998 which is formally referred to as an investment club, a registered company. 'The model was a stokvel. Ten of us came together and we decided to buy a holiday home in Mpumalanga, and we converted the stokvel into a company. We have been owning that property since 1998, and it is what I can call passive income generation,' she told IOL. 'Note that the property we purchased as a stokvel is an inheritance for our children. This is something that I am trying to preach, this is not about me. Two of our fellow members have passed away, but their children are still benefiting from that stokvel. That is how we have structured it.' IOL has previously reported on incidents where members of traditional stokvels have been robbed while gathered in a house to share money, or of unscrupulous members fleeing with other members' savings. Skenjana said in this era, systems are digitalised to avoid the common pitfalls of dealing with cash. 'My advice is, stop handling cash. Even in our personal lives, it is not safe to be walking around with lots of cash in your handbag or in your back pocket. My advice to stokvels is that they must use the banking system. Banking is fairly accessible in South Africa now, unlike the era when stokvels were initially formed. People have to deposit directly into bank accounts. When it is time to share, at the end of their cycle, they should just do transfers,' she said. 'Handling cash is a no no. Unfortunately, it is still happening with the older generation, because some still say it feels good to have to touch the money physically, to see and feel the paper.' Skenjana said commercial banks have a lot of work to do in terms of guiding the stokvel members on investments. 'Quite the bulk of stokvel money is sitting in bank vaults. Members of stokvels save with the four major banks in South Africa. Having been part of the stokvel terrain, I have even established a stokvel academy. I am still to see a bank that says, we are committed to educating these stokvels. They love these stokvels for their databases, and they try and harvest as many stokvels as possible,' she said. 'In terms of financial education, it is still lacking.' In December, IOL reported that the provincial commissioner of police in Limpopo, Lieutenant General Thembi Hadebe, has warned community members, particularly social clubs or stokvels, against carrying large amounts of money, as they can be targeted by criminals and robbed. The appeal was made by the provincial police commissioner following a house robbery where a mother and daughter were robbed. Provincial police commissioner in Limpopo, Lieutenant-General Thembi Hadebe Image: SAPS 'A 54-year-old female victim fell victim to a house robbery involving a social club's money at Strydkraal Block A village under the Sekhukhune district on 9 December 2024, at about 10 pm,' Limpopo provincial police spokesperson, Colonel Malesela Ledwaba, narrated. He said preliminary investigations revealed that members of a local social club held a meeting at the victim's residence to discuss how they were going to distribute the money they had saved. That meeting started at around 3 pm. 'The meeting concluded at approximately 7 pm, and the members of the social club departed to their homes and left the victim with her teenage daughter,' said Ledwaba. 'At about 10 pm, three unknown male suspects instantly broke into her house and robbed a substantial amount of cash belonging to the social club and later locked the two victims inside one of the bedrooms before fleeing the scene on foot.' The traumatized mother and daughter were later rescued by a relative. The matter was then reported to the police. IOL News
Daily Maverick
3 days ago
- Daily Maverick
Choc to the system — sweet treats under siege as cocoa prices soar globally
Climate shocks, crop disease and a global supply shortage are resulting in South Africans paying up to 40% more for their favourite chocolate bars and slabs. World Chocolate Day was celebrated annually in the first week of July, but this year there wasn't much to be merry about. In May, global cocoa prices hit R197,500 per tonne. From R154,000 in July 2024, it has been a relentless upwards march and it's hitting South Africans' wallets. And, if that Aero or Bar One feels lighter lately, it's because the world has entered an unprecedented era of chocflation. Ghana and Ivory Coast together produce the lion's share of the world's cocoa. Extreme weather and crop diseases have hit these producing regions exceptionally hard over the past five years. 'The increased variability of seasonal rainfall in the producing areas of the world due to climate change has threatened the viability of cocoa production,' says FNB senior agricultural economist Paul Makube. Cocoa trees need temperatures of between 20℃ and 30℃ and just the right amount of rainfall to grow, Makube explains, but droughts are becoming more frequent and farmers are being forced to adapt or abandon their crops. In addition to climate extremes, crop diseases are decimating harvests. Makube says the cocoa swollen shoot virus has been causing disease that has cut about 17% of Ghana's annual cocoa output over the past few years. Other disease threats that have adversely affected production include witches' broom, frost pod rot and black pod rot, says Thabile Nkunjana, senior economist at the National Agricultural Marketing Council. 'The production, yields and quality of cocoa have all been significantly impacted by these factors and consequently prices have risen sharply in recent years,' Nkunjana says. The numbers are eye-watering. As of June, cocoa hit R215/kg – the highest since the World Bank began tracking prices in 1960, Nkunjana says. In 2023 it was just R66/kg. The International Cocoa Organisation now predicts a global supply shortfall of nearly 500,000 metric tonnes for the 2023/24 season. Nevertheless, the global production outlook remains optimistic, Makube says, although demand prospects are worsening because of 'the uncertainty regarding potential inflationary pressures emanating from the US tariff onslaught'. Global squeeze, local crunch The shock is rippling across the globe and down to the local supermarket. In 2016, a chocolate slab in South Africa would have cost an average of R13.27, according to Statistics South Africa. Today, the price of a Dairy Milk slab ranges from R20 to R50, depending on where one shops. Data from consultancy group Eighty20 shows double-digit inflation on chocolate prices almost every year since 2020, far outpacing the overall consumer inflation rate. Since December 2021, the price of chocolate bars has shot up 40%. Spar is 'closely monitoring the global cocoa supply challenges and the resulting price increases in chocolate products', says Gerhard Ackermann, national merchandise executive at the Spar Group. The retailer is trying to cushion the blow with value promotions and proactive stock management. Pick n Pay says it 'always works to deliver the most affordable prices' while ensuring shelves stay stocked. South African chocolatiers are also recalibrating to weather the cocoa price storm. For Beyers Chocolates, a family-owned company that has been making chocolates since 1987, the steep rise has posed many challenges, says its marketing lead, Susan Krause. The company has responded with 'long-term supplier partnerships, smarter procurement planning and operational efficiencies across the value chain', Krause says. By keeping production local, it has been able to soften some of the cost hikes. At luxury craft chocolate maker Afrikoa, which sources its beans from farmers in Tanzania, the sustained increase in prices has heavily influenced cost, even though direct trade has helped the company to absorb 'some volatility', according to head chocolatier Kyle Hickman. Afrikoa has had to become 'more agile in production planning, prioritising efficiency and minimising waste', Hickman says. But he notes a silver lining in that 'informed consumers increasingly value the kind of responsible production that Afrikoa represents', which strengthens the company's brand story despite price sensitivity. Honest Chocolate cofounder Anthony Gird says the rise in cocoa prices, especially over the past two years, has led the company to 'do a price increase just to keep up' earlier this year. He is hoping it won't have to happen again soon, as the cocoa price hasn't risen significantly since Honest Chocolate's last bean consignment purchase. The company's clientele, Gird says, are understanding. 'People who buy our chocolate understand the value in the quality and ethics of the product.' Even global brands like Nestlé are trying to manage the chocflation. The company's 'Africa for Africa' model is focused on local sourcing and production and is tightening operations to manage costs, says Conny Sethaelo, communications director at Nestlé's east and southern Africa region (ESAR). 'This helps us maintain relevance and trust, even in challenging economic conditions,' she says. Laboratory-crafted luxury While traditional cocoa producers and users fight high prices, some scientists are bypassing the pod entirely. Using plant cell cultures in vats of sugary water, researchers are growing cocoa in labs. But not everyone is excited by the science. 'We respect the innovation behind lab-grown alternatives, but our brand is firmly rooted in celebrating the authenticity of African-grown cocoa,' Hickman says. Gird echoes this sentiment and says Honest Chocolate won't be considering lab-grown cocoa in the near future. 'If cocoa supplies dry up to the extent that it becomes needed, then we would be open to giving it a try.' Krause says Beyers Chocolates is 'keeping an eye on global innovations in the category' and is open to sustainable practices that fit its values. Nestlé, on the other hand, is more focused on soil. 'Nestlé ESAR is investing in regenerative agriculture, traceable technologies and community-based farming models,' Sethaelo says. Climate change is hitting cocoa farming hard and Nkunjana notes that Africa is especially vulnerable. 'Policies that lower the danger of climate change and protect farmers from losses should be given regional priority,' he says. These policies will encourage farmers to grow their cocoa production and improve production as a result. Makube sees a way through: a mix of infrastructure upgrades, financial access for farmers, sustainable agroforestry and public-private partnerships. 'The world needs to think about close substitutes for food or food commodities in general in light of the difficulties cocoa is facing,' Nkunjana warns. 'This will ensure that there is a steady supply of food and protect consumers from price shocks.' Despite the crunch, the nation's sweet tooth is undeterred. More than half of adult South Africans have eaten some form of chocolate in the past month, Eighty20's data shows. Bar One, Lunch Bar, Aero, Black Cat and KitKat remain at the top of the sugar-fuelled food chain. Even the viral Dubai chocolate phenomenon, which debuted at an astronomical price point of R1,000 last year, has found a niche, with R400 versions now for sale at Dis-Chem.
