• Old Mutual MindSpace Team

Retrenchment on the rise: How to look after your finances

With retrenchments during lockdown increasing by 156% compared to the whole of the previous year, and our country’s unemployment rate already at a record 30% before the pandemic hit, job security is very much a valid concern for South Africans. Use these handy tools to boost your financial health and give you peace of mind, so you can be better prepared to weather the uncertainty.

It’s never pleasant when a company has to retrench staff. The process creates stress for everybody involved, while everyone wonders if their names will be on the list and what they’ll do if they are.

Retrenchment fears fuel disability claims

Thirty-eight percent of respondents to the most recent Old Mutual Disability Monitor believe that fear and stress due to potential job loss or retrenchment make employees more likely to submit disability claims in a tough economy.

But the people who lose their jobs are only part of the equation. What about the ones who are left behind? Some 21% of respondents said that those who remain after a round of retrenchments have to pick up more work – and this, they say, results in psychological and physical stress due to having to pick up the slack and work longer hours.

‘Worry about finances, if not dealt with and planned for, can lead to unnecessary anxiety, and impact someone’s mental health and ability to perform at work.’

There’s also the danger of employees taking on extra work to appear indispensable. (‘They won’t retrench me if I do all the work,’ the thinking goes.) But that only piles the pressure on.

‘We noticed a significant increase in the number of disability claims we receive,’ says Urvashi Ramjee, Head of Claims Management at Old Mutual, about the research. ‘We realised that a lot of it is related to environmental issues, such as not coping in the workplace and not coping in general. The economy was putting strain on them, and there were many workplace stressors that were causing issues.’

Tools to keep on track

The good news is that there are tools available to help reduce your money worries and keep your finances on track. Old Mutual’s Financial Wellbeing Programme is offered free of charge as a way of helping South African businesses and retirement funds to empower, educate and enable all employees to achieve the best possible financial outcomes for themselves and those they care about.

The programme – offered through e-learning, onsite learning, financial-health assessments, member support services and individual advice – is designed to make learning about money management easy, fun and engaging.

Similarly, Old Mutual Moneyversity provides fun, engaging online educational tools that help you make the most of your money. Its online courses show how to save and invest your money, take personal financial responsibility, plan for retirement, and get your debts in order.

‘Everyone suffers from pressure in many ways, from work, family and friends, or pressure we unknowingly put on ourselves,’ says Old Mutual’s Product Head Jaco Gouws. ‘It is important to find a healthy balance between work and personal time and to prioritise stress management, as stress can contribute heavily to emotional burnout and mental illness.

‘Worry about finances, if not dealt with and planned for, can lead to unnecessary anxiety, and impact someone’s mental health and ability to perform at work,’ Gouws cautions, adding that working with a financial adviser can provide much-needed peace of mind when it comes to managing your money better. What price would you put on that?


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