Eric Van Biesen; Mike Lonergan, regional corporate sales director;
and Ebrahim Ebrahim, chief marketing and communications officer.
75pc of Bahrain staff 'don't save enough'
Manama, April 29, 2014
About 75 per cent of employees in Bahrain are not saving enough to support themselves and their families in later years, according to a survey.
The lack of ‘savings culture’ will have major repercussions for future as the average life expectancy reaches 85 years, the Takaud study said. The study aimed at understanding the saving and investment habits of employees in the kingdom.
However, the survey found that 93pc of Bahrain's companies understand the importance of employee savings schemes and the critical issue of employee and family welfare and its combined impact on their businesses.
Some highlights of the survey:
• Over 90 per cent of the companies surveyed understood the importance of being involved in not just the welfare of their employees but their families too.
Employers that support their staff and their families will always generate a more ‘fierce’ loyalty than employers who do not. Key measures such as employer savings schemes help to retain employees for longer period, reduce aligned staff turnover costs and in turn boost both business performance levels and wider profitability.
• 71pc of respondents advance salaries to employees, or otherwise loan them money.
The cost of advancing salaries to staff is a significant expense for a company and it is a non-productive use of their working capital and financial resources. Moreover, it suggests that employees in Bahrain have few places to turn when managing their finances. The long term answer is for employees to build up their own financial buffer – and from there achieve financial independence. With there is little existing savings, the way forward is to get staff to get into the habit of saving through employee savings schemes regularly.
• 93pc of companies surveyed understood that employee savings schemes are important to strengthen employee motivation in the workplace.
Unmotivated employees are less productive and change jobs more often. The cost of replacing an experienced employee for example can be an additional 90pc to 150pc of their annual salary when one factors in the loss of revenue, aligned advertising and training costs for the recruitment of each new employee.
• 73pc of companies surveyed agreed that companies should contribute towards staff savings programmes.
This is a significant piece of news and would help create a much needed savings culture in Bahrain for employees as well as across the GCC which suffers from the same issues. For example, 64pc of GCC citizens save less than a fifth of their monthly income and 84pc of GCC residents believe that their savings are not adequate for their future.
Currently the average employee in the Mena region changes jobs every 5.2 years, less than half the time on the job compared to France, Germany and the Netherlands, where employees remain in jobs on average 11.7, 11.2 and 10.6 years respectively.
Takaud acting CEO Eric Van Biesen said: “As the Mena region’s specialist savings and pensions provider, we understand the importance of engaging with the community through research and development. We are pleased to learn that most companies in our primary market, Bahrain, understand the importance of employee savings schemes within their wider remuneration strategies. Through implementing well-structured and personalised savings solutions, more companies are conforming to global best practice and helping their employees achieve their goals." - TradeArabia News Service