Severance should come with counsel, says survey

INSURANCE brokers, steelworkers, call centre agents, retail assistants, bank clerks and public servants who have been hit by retrenchments all wish that employers rendered financial advice before giving their employees severance packages.

More companies are going into liquidation because of the tough economic operating environment in SA, while the advent of automation in the workplace has often rendered humans redundant in a growing number of industries.

People who have been retrenched want access to financial advisers so that they can put their packages to better use, a survey of 50 retrenched workers by Foshizi, a consumer insights consultancy, has found.

Foshizi MD Lebo Motshegoa said: “Those who are retrenched feel there is a need that companies take them through financial advice before giving packages.”

The survey was conducted to gauge how retrenched workers spent their money.

Paying off debt, including home loans, starting new businesses, buying shares, settling children’s tuition fees and home renovations topped the list.

However, those who wanted to start spaza shops or taverns found it difficult going.

This was because a large number of spaza shops were owned by foreign nationals, while stricter by-laws made it hard to enter the tavern market, respondents in the Foshizi survey said.

Some of the respondents said they regretted not speaking out against colleagues who used work resources for their personal gain, as they believed that this behaviour was often a contributor to a company’s demise.

Few of those surveyed were able to find other jobs quickly, the survey found.

Some of the retrenched skilled workers surveyed by Foshizi — including teachers, nurses and administrators — said they did not mind relocating to rural areas for new work opportunities.

Debt Rescue CEO Neil Roets said that although offering financial advice would help, he advocated for this to begin in schools to inculcate a savings culture earlier on and better equip a young person for dealing with a possible retrenchment later in life.

A 2014 FinScope survey showed that only 44% of salaried individuals in SA had any long-term savings or retirement products.

Source: http://www.bdlive.co.za/economy/2015/09/07/severance-should-come-with-counsel-says-survey

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