Care for iMali workshop Watch video

2014 CASE STUDY:

Taking care of personal financial matters

The events at Marikana on the platinum belt in August 2013 highlighted that there were many extraneous factors impacting on the lives of employees, which contributed to the resultant labour instability in the sector and beyond. While wages became a rallying point for the strikes, the situation was exacerbated by other issues, including poor living conditions, lack of service delivery and high levels of employee indebtedness, which tend to severely reduce employee take home pay.

With this in mind, Sibanye launched a financial literacy and awareness programme aimed at assisting employees take care of their personal financial matters. Thabisile Phumo, Sibanye’s Vice President: Communications, says indebtedness and forced savings came through as a significant issue in an employee needs survey which the Group undertook in 2013. The study enabled Sibanye to understand its workforce better and engage with employees based on facts rather than assumptions about their needs, as well as revealing that demographics are important determinants of perceptions, concerns and needs.

According to the study, many employees across the Group emphasised finances as an important issue – from the basics of understanding pay slips and why deductions are made, to requests for deductions that represent enforced savings. The complexity of the problem was also apparent in the high number of emolument attachment orders (often referred to as “garnishee orders”) against the employee payroll at Sibanye’s operations, resulting in take home pay being severely reduced.

James Wellsted, Sibanye’s Senior Vice President: Investor Relations, says that, in order to pre-empt problems and from the perceptions articulated by employees in the study groups, Sibanye established its CARE for iMali/Khatelel’imali/Hlokomela chelete (“care about money” in isiXhosa and Sesotho), which has been well received by employees.

The programme is an extension of the value system on which the Group has founded its corporate culture:

Designed to improve individuals’ financial literacy and understanding, the CARE for iMali programme has become one of the most popular initiatives among Sibanye’s people, and will continue to be developed and entrenched over time.

Becoming financially savvy

As James emphasises, Sibanye’s approach, in direct partnership with employees, is to help ensure that money concerns do not affect employees’ lives – that Sibanye’s people manage their affairs from an informed position.

The CARE for iMali programme is straightforward in its conception and in its direction, nevertheless. Understanding the implications of debt is the principal matter raised on the first day. These are not courses intended to turn people into financial planners. Rather, they are intended to help people understand the implications of emolument attachment orders and the implications of taking on too much debt and becoming snared by loan sharks – the “mashonisas” operating illegally, charging exorbitant interest rates and preying on unsuspecting borrowers.

More than 11,000 employees and their family members have benefited from the voluntary course that can stretch over two days, and their responses have been unanimously positive. The popularity and perceived benefits of the courses, sponsored by Sibanye, are highlighted by the growing numbers of employees seeking to enrol. The first programme is set to continue for two years but will be extended if demand persists.  

Employees’ spouses are also catered for in the course as they are, more often than not, the family members who have to manage the money a spouse brings home. Where and how financial training is carried out is important – for employees, on the mines is best and in their own languages. For spouses in the labour-sending areas or in local communities, the sort of flexibility that might come from working with “stokvels” (a traditional South African saving scheme) can deliver greater benefits. In November 2014, Sibanye conducted week-long training for communities in the Eastern Cape.

This programme aims to help determine the factors causing indebtedness and formulate the means to resolve these issues. It delivers the skills needed to resolve the issue – it then becomes the employee’s responsibility to put corrective processes into effect, if necessary, with help and guidance from Sibanye.

On a practical basis, Sibanye has initiated an audit of all the emolument attachment orders that it is legally obliged to implement. Some have been found to be illegal or persisting long after the original debts have been repaid. Thus far, interventions by Sibanye have resulted in over R200,000 illegally deducted being recovered and repaid to employees prejudiced by the illegalities.

Employees have not always understood the whys and wherefores of deductions from their earnings. CARE for iMali is setting about addressing that gap. However, if employees are to benefit, Sibanye cannot ignore issues that lie strictly beyond the mine’s gate. This is a holistic approach to the issue.

The various threads running through the study groups come together at a certain point. People planning for their retirement have proposed compulsory savings schemes funded by deductions from monthly wage packets. And others planning to buy a house in Gauteng have expressed preferences for living out allowances converted into mortgage bond payments.

The CARE for iMali project is delivering early results that are positive, and will hopefully put Sibanye employees on a solid road to financial freedom.