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“No man is an island, entire of itself, every man is a piece of the continent, a part of the main.” John Donne, poet
Before you get your unique employee number, become a platinum loyalty cardholder with access to endless VIP points and health smoothies, receive calls about the latest offer or an SMS from your bank wishing you a happy birthday ... you are first and foremost an individual.
You are an individual with desires, interests and values that every product manufacturer, service provider and employer is trying to understand and anticipate to provide, and sometimes sell, something of value – or at least what they perceive to be of value – to you.
Given that South Africa has a working population of 9 644 000 in the formal nonagricultural sector as at the first quarter of 20171, can we expect employers to get this right for each one of us? And if so, how? How should they know what we want when we ourselves don’t always know, and when what we want changes from day to month to year?
For employers, policymakers and service providers to engage effectively in co-creating a comprehensive social security package of meaningful benefits, they need to apply everything they know to the needs of the individual on the receiving end of these benefits – and this includes everything they know about the individuals themselves.
We’ve said before that employees still have a basic need for savings, income and medical protection regardless of how the world of work changes. A comprehensive benefits framework will take into account lifestyle needs such as housing and transport (which we discuss in more detail further on), financial protection against those ‘what-if’ scenarios, and savings that enable the accumulation of assets over time.
Because we all have obligations beyond our individual aspirations, employers can also consider providing personal improvement and protection benefits for both the individual employee and their family. This includes implementing policies which allow for the fact that ‘life happens’, acknowledging there will be times when people need more than just the legislated time off to attend to personal matters.
So, what should we be thinking about when developing this individualised, customised ‘package’ of benefits? In this chapter, we provide some direction by exploring employees in the context of their extended responsibilities. We then address the importance of considering different ‘money mindsets’ – attitudes and behaviours towards money that may influence the way individuals engage with these benefits.
By taking both these perspectives into account, we believe employers will be in a stronger position to offer the right benefits, at the right time, to employees who need them.
Individuals in the context of their responsibilities
Indeed no one is an island, especially in South Africa where the average household is made up of four people. This figure does not include grandparents or in-laws who live on the same property, extended family members whose numbers climb well into the fifties, and other individuals or groups who may not be related to but are dependent on you, either financially or for some other reason.
Adding to our ‘piece of the continent’ is a network of friends, colleagues, community circles and social organisations to whom we believe we owe some duty of care – whether formally or informally.
We see this network of significant others through our ‘responsibility lens’. The responsibility lens framework is a visual representation of an individual’s ecosystem of relationships and interdependencies between role players (industry, employer), partners (family, friends) and influences (social, community structures), as shown in Figure 4.
Naturally, we do not expect any two individuals to have the same responsibility lens. While the magnitude and focus of each lens will vary from person to person, no decision or activity – moving home, for example – by the individual at the centre is made or performed in isolation.
There are various forces at play that affect our individual interactions, decisions and outlooks within this lens. Personal circumstances (financial or otherwise), changing lifestage needs, cultural nuances, and upbringing, for example, play a role in determining how we connect the dots and allow the different lenses to co-exist in a balanced way.
The responsibility lens framework is a visual representation of an individual’s ecosystem of relationships and interdependencies between role players (industry, employer), partners (family, friends) and influences (social, community structures).
Many South African households have a non-nuclear construct, with varying responsibilities to influencers, participants, benefactors and decision-makers. Increasing pressure on and expectations for younger generations to financially support their parents before and after retirement further impacts on their own spending and saving patterns. At the same time, there is a growing trend to reduce contributions to long-term or retirement savings in order to fund monthly expenses.
Consider this reality for a large portion of South Africans: according to the survey of employees in Old Mutual’s Savings and Investment Monitor (July 2016), 45% of children expect they will have to support their retired parents – a significant increase from 2010 (26%).
By using these archetypes as a platform for discussion, employers and advisers can engage with employees about the benefits that would best suit their individual lifestyles, responsibilities and personalities.
Moreover, the 2017 edition of the survey reports that 58% of respondees expect to financially support both parents and other family members into the future, a trend that’s given rise to the term ‘sandwich generation’.
Members of the sandwich generation are among the first group of consumers who will make savings and investment sacrifices to ‘boost’ their monthly income so they can cover their expenses. And with unemployment now affecting 30.1% of young people (aged 15 to 24 years) and 27.7% of the total population, the chances are high that unemployment touches most South African families in one way or another.
With this in mind, it’s clear that the way an employer structures its employment policies and benefits can have a significant impact on our ability to meet our responsibilities and obligations. Using this lens, here’s what an employee might want to consider:
But that’s not all that impacts on my relationship with the employer. Other considerations that come into play include:
Where we are moving to is a model of benefits that is light years away from the tradition of paternalism. Instead of a model where the employer says, “This is what you need and this is what I will give you,” the pendulum has now swung 180 degrees to, “How can I help you get what you need to make your work life here work for you and your family?” The more holistically employers can understand an employee’s life, the more likely they will be able to structure policies and benefits that make sense for their employees.
Throughout recorded history, most people in Europe – as elsewhere in the world – had possessed just four kinds of things: those they inherited from their parents; those they made themselves; those they bartered or exchanged with others; and those few items they had been obliged to purchase for cash, almost always made by someone they knew. – Tony Judt, historian
The way we relate to employee benefits, compensation and money exchanges of any kind has to be understood through the lens of past experience and memories about money. The biases these influences introduce to our decision-making belie the notion of rational economic decisions. This is why, for benefits to be engaging, they need to speak to what matters to us, help us address our greatest fears, and provide clarity when notions of money simply leave us confused.
For most of us, our relationship to money is based on our experiences of and exposure to money during childhood. If you grew up in a home where money was readily available and there was always enough at the end of the year for a family holiday, you are more likely to be free-spirited when it comes to spending on creating new memories, paying little attention to the cost.
If your childhood was spent watching your parents borrow money from neighbours, banks and community mashonisas (credit providers) almost every week to survive, you are more likely to be focused on attaining as much money as possible – at the fear of losing it all – while at the same time being price- and savings-sensitive.
In the middle of the spectrum are those whose childhood experience with money was balanced: always enough to get by from month to month, but not quite enough to enjoy spontaneous ‘luxuries’ or family outings.
The fact is, regardless of where our money problems stem from, the way we respond to these pressures – for better or worse – is a function of these money mindsets.
As part of a recent study in partnership with Accenture’s Value Proposition Team to better understand our relationship with and attitudes towards money, we explored four possible mindsets that represent different beliefs, behaviours and goals.
These ‘money mindsets’ are plotted on two axes: one representing the degree to which each mindset is structured (rules-based or instinctual), the other showing the extent of scope (focusing on today or tomorrow). From this exercise, four archetypes are identified: achievers, balancers, experiencers and explorers.
Figure 6: Characteristics of each money mindset
As we see above, these archetypes, and the characteristics that define them, can provide useful insights into how employees perceive the value of money in relation to their needs and the obligations of their respective responsibility lenses. By using these archetypes as a platform for discussion, employers and advisers can engage with employees about the benefits that would best suit their individual lifestyles, responsibilities and personalities.
Beliefs, behaviours, needs and goals:
Beliefs, behaviours, needs and goals:
Beliefs, behaviours, needs and goals:
Beliefs, behaviours, needs and goals:
Figure 7: Behaviours related to money mindsets
It may be that we identify with more than one of these mindsets, which is not unusual, given the number and complexity of factors that influence our financial decisions and behaviours. The figure below shows how we can refine the way we identify with each mindset by considering the relative importance of certain behaviours related to each (for a detailed discussion on how we make financial decisions, see Benefits Barometer 2015: Financial Well-being).
We can refine the way we identify with each mindset by considering the relative importance of certain behaviours related to each.
Mark Zuckerberg addressed an audience at Harvard University with the following words: “Our generation will have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks. When our parents graduated, purpose reliably came from your job, your church, your community. But today, technology and automation are eliminating many jobs. Membership in communities is declining. Many people feel disconnected and depressed, and are trying to fill a void2.”
Throughout this chapter we’ve emphasised the importance of, and value in, engaging with employees as individuals in our efforts to develop customised solutions within a framework of benefits. Yet much is made today of how generational differences shape attitudes towards money. Baby boomers (born 1946 to 1964) and millennials, or Gen Ys (born 1977 to 1995), are supposed to manifest distinctly different attitudes towards their jobs, their careers and everything in between. For some experts, these differences are a function of changing technologies. In South Africa, our distinctive historical experience, and the roles that our families and friends played in the context of those different periods, provides an added dimension to those generational differences. But the contrast also serves to show how far the country really has come for this family here.
We investigated this by asking two individuals from the same middle-class, South African family a series of questions related to their views on jobs, career paths, employers and benefits. This is by no means a research study at scale, but merely an exercise to showcase extremes and just how our impactful our environments can be.
*To maintain the anonymity of our respondents, we have changed their names.
“I was born and raised in a small farming community in KwaZulu-Natal. I have fi ve brothers and my parents were farmers, and later owned small businesses. However, because of the apartheid system, my dad could only own a 49% share and partnered with his white personal assistant, who owned 51%. My brothers all followed in my parents’ footsteps as farmers, and still own their own farms and businesses.”
“My childhood was really good relative to the majority of non-white kids my age. I went to a Model C school and feel as though I received a good foundational education. My older siblings and mother guided me as I grew up and from their experiences showed me right from wrong.
My mother worked mostly in fi nance and had multiple jobs over the years, while my father tried going into business by himself, but was unsuccessful.
A dream job would be one that involves what I am passionate about (architecture and design), but not through someone else’s vision – ultimately working for myself is the dream job.
My passion for architecture and design is not limited to buildings. The design of clothes, shoes, furniture, cars, musical instruments, phone apps, web pages and machinery is also something I am interested in. I believe that I am able to do multiple things that I love doing, and money happens to be a consequence of doing those things. Basically, I’m a Renaissance man.
My peers think the same way, with slight differences based on how they were raised. I was raised to chase my dreams and desires and sort of do it on my own. It sounds clichéd, but I want to leave my mark on the globe – hopefully leaving it in a better way than I found it.”
“Schooling in the 1960s and 1970s was run on the ‘Coloured Affairs’ education system. As a result, our choice of careers was limited to teaching, law, nursing or medicine.”
“Being introduced to art in school is where I fell in love with the creative world – creating things from imagination was borderline genius. The people I interacted with introduced me to different types of music and the people who made the music. Their creativity and passion are what influenced me to choose a creative career path. My earliest career choice was to be a graphic designer – I didn’t know how much they earned or what qualifications I needed, but I knew they were creative people and that I wanted to be a part of it.”
“Most of the jobs advertised were for whites only and required certain qualifi cations. In the period 1974 to 1980, the whites benefited more from jobs advertised, and the employees typically employed white candidates because they had a better education most of the time and they were bilingual, which was a requirement. The pension funds were not opened for non-whites to join immediately. I had to work for a company for five years or be over the age of 25 before I could qualify to be a member of the fund.”
“I started looking for my first job in 2015, the last year of my undergraduate degree. In order to progress to postgraduate, I needed to work for a year at an architecture firm. The political climate was quite rough as students were protesting and I was part of the protest action. Different parties were debating their views and the focus was largely on higher education around the country.
Economically the country was facing a bad year in terms of growth, I think 0.5% growth was predicted and this later became 0%. However, this did not affect me or my classmates in getting jobs, even if for some it was in different provinces.”
“Fortunately, I worked in the family business when I left school so there wasn’t a need to job hunt. But at the time your options were limited to either reading about vacancies in the local newspaper, hearing about a job from friends and family, going door to door or knowing someone who was looking to hire.”
“I googled architecture firms around Johannesburg and sent them an email informing them that I was looking for work. I attached a list of my academic credentials and a portfolio of work. I shortlisted the firms I really wanted to work at based on the projects they had done. I persisted with calls and emails frequently – Google and LinkedIn were really the only tools I used to find a job.”
What has undoubtedly changed through the generations is the dramatic shift in how we acquire knowledge and make decisions. Today’s millennials have none of that need for verification from a voice of authority. In their world, the collective wisdom of the masses provides a more reliable resource than the voice of the specialist. Can the same be said of their employers? Probably not. Employers are only now beginning to explore how they can more effectively drive HR decision-making on the basis of what the HR data suggests. This, and more, is discussed in our chapter on The Promise of Workforce Analytics.
“After marriage and relocating to Johannesburg, I have had nine different jobs. As a mother of fi ve, the change was always due to chasing a better salary and perks. The most important was medical aid – the companies that paid a larger portion, for example, 60% paid by the company and 40% paid by the employee. I also considered the difference in pension fund benefi ts, car, cellphone and fuel allowances when those were offered.”
“My very first job was during my high school days – it was at the local Pick n Pay. That job was purely to provide extra pocket money and art supplies. My second job, during early years at varsity, was at a Guess retail store. Similarly, the job at Guess was purely to provide pocket money and subsidise expenses at varsity. The third job was the internship for a year.
I changed jobs to suit my needs at the time. I left Pick n Pay to focus on matric studies, I left Guess to focus on varsity, and I left the architecture firm to go back to varsity to complete my honours.”
“With the introduction of the computer and Internet, we were
always sent on computer literacy training, but most times the
company sent us on ‘in-house’ training on programmes and
processes that were relevant at the time.”
“I actually don’t think that millennials are in any way more
superior to baby boomers, aside from understanding
technology. No one can deny their experience and knowledge
within any given company or industry. I do however believe
that their reluctance to adopt technology holds them back from
connecting to work and the social aspects.”
“I believe baby boomers have a more mature view of the world and business in general. We are more structured, have better work ethics and understand what is required of us in a work environment, and more come with holistic experiences. We are also more hands-on.”
“But there’s probably more than just the technology side that divides us from baby boomers. I look at my parents and it’s all about what they own – the car, the house, the living room suite. My world is beginning to wonder: why be so restrictive? If I can just use Uber as and when I need to and then use my savings more effectively to say, buy the art that I want, then why bother with the car? Why bother with the living room suite when I can rent what I need as and when? I would rather spend my money on the things that really change the quality of my life – the art, the travel, the food, the friends. It’s all about accessibility to the things that I need – if I can get that, do I really need to own it?”
The stories tell it all. Our employees are becoming an increasingly diverse and complex population to engage with. Standard solutions simply won’t capture any one group’s needs or wants. Creating a viable employee benefits framework that can better cater to this changing population demands that we understand the history, the values, the psychology, and the relationship lens of our employees. If we can understand that then we will at least have the right starting point for a meaningful discussion. Designing the optimal answer is the question we will try to answer in our discussion of 'Benefits that Matter'.
1 Stats SA, 2017, Quarterly employment survey (Q1: 2017)
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